FOR IMMEDIATE RELEASE August 2, 2001

THE WALT DISNEY COMPANY REPORTS EARNINGS FOR THE QUARTER AND NINE MONTHS ENDED JUNE 30, 2001

BURBANK, Calif. – The Walt Disney Company today reported

earnings for the quarter and nine months ended June 30, 2001.

Pro forma revenues and segment operating income for the quarter

decreased 1% and 7% to $6.0 billion and $1.1 billion, respectively, from the

prior-year quarter. Excluding the restructuring and impairment charges

and gain on the sale of businesses discussed below, net income for the

quarter decreased 3% to $479 million, while diluted earnings per share

remained flat at $0.23.

For the nine months, pro forma revenues increased 1% to $19.4

billion and segment operating income increased 6% to $3.4 billion.

Excluding restructuring and impairment charges, gain on the sale of

businesses and the cumulative effect of accounting changes, net income

and diluted earnings per share increased 17% to $1.4 billion and 18% to

$0.66, respectively.

“In a soft economy, Disney’s overall performance continues to be

solid,” said Michael D. Eisner, Chairman and CEO of The Walt Disney

Company. “Our studio has added yet another quarter to a year of strong

growth. At our parks, effective expense-management measures have

largely compensated for the weaker attendance that we had anticipated.”

“We also continue to take steps to build for the future, as evidenced

by our acquisition of Fox Family Worldwide. Once the economy begins to

strengthen, we will be well positioned for accelerating growth”.

Fox Family Acquisition

On July 23, 2001, the Company announced that it had entered into an

agreement to purchase Fox Family Worldwide for $3 billion in cash, plus

the assumption of $2.3 billion in debt. Among the businesses being

acquired are the Fox Family Channel, a programming service that currently

reaches approximately 81 million cable and satellite television subscribers

throughout the U.S.; a 76% interest in Fox Kids Europe, which reaches

more than 24 million subscribers across Europe; Fox Kids channels in Latin

America, and the Saban library and entertainment production businesses.

The Fox Family Channel is one of the few fully distributed stand-alone

channels and gives Disney a platform for launching ABC Family and

strengthening its position as the leading provider of family television

programming. The acquisition of the Fox Kids international channels

strengthens Disney’s presence in important markets in Europe and Latin

America and enhances the Company’s potential for growth domestically

and internationally.

Basis of Presentation

The Company acquired Infoseek, created the Internet Group and

disposed of Fairchild Publications in November 1999. In January 2001, the

Company announced the closure of the GO.com portal business and the

conversion of Internet Group common stock into Disney common stock.

To enhance comparability, the Company has presented operating

results on a pro forma basis, which assumes these transactions occurred at 2

the beginning of fiscal 2000, eliminating the one-time impacts of those

events. Additionally, prior-year pro forma operating results for the Studio

Entertainment segment have been restated to reflect the impact of the Film

Accounting change discussed below.

The Company believes that pro forma results provide additional

information useful in analyzing underlying business results. However, pro

forma results are not necessarily indicative of the combined results that

would have occurred had these events actually occurred at the beginning

of fiscal 2000, nor are they necessarily indicative of future results.

On an as-reported basis, results for the quarter and nine months

include restructuring and impairment charges totaling $138 million and

$1.3 billion, respectively. Included in the charges for the nine-month

period is $862 million associated with the closure of GO.com. On a pro

forma basis, restructuring and impairment charges exclude the impact of

the GO.com closure and, as a result, amount to $138 million and $466

million, for the quarter and nine-month periods, respectively. See Table C

for details of these charges. In addition, as-reported results for the prior

year include a $243 million pre-tax gain on the sale of Fairchild

Publications in the first quarter and a $93 million pre-tax gain on the sale of

the Company’s stake in Eurosport in the third quarter.

On an as-reported basis, revenues for the quarter and nine months

were $6.0 billion and $19.5 billion, respectively. Including the restructuring

and impairment charges and gain on the sale of businesses, as-reported net

income attributed to Disney common stock was $392 million (or $0.19 per

share) for the quarter and as-reported net loss attributed to Disney

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common stock was $94 million (or $0.04 per share) for the nine months

including the cumulative effect of the accounting changes ($0.13 per share).

See Table D for a reconciliation of as-reported income (loss) per share

attributed to Disney common stock to pro forma earnings per share.

Unless otherwise noted, the following discussion reflects pro forma

results.

Studio Entertainment

Studio Entertainment revenues for the quarter increased 8% to $1.3

billion, while segment operating income increased to $65 million compared

to a segment operating loss of $1 million in the prior-year quarter.

Studio Entertainment results for the quarter were primarily driven by

growth in worldwide theatrical motion picture distribution and stage

plays.

Improvements in worldwide theatrical motion picture distribution

were primarily due to the releases of Pearl Harbor, Spy Kids and Atlantis.

Growth in stage plays reflected performances of The Lion King in additional

cities.

The Company’s live action and animated titles continued to perform

well on DVD reflecting the overall strength of the DVD market.

Media Networks

Media Networks revenues for the quarter decreased 6% to $2.1 billion

and operating income decreased 29% to $470 million from the prior-year

quarter.

Broadcasting results for the quarter reflected declines at the ABC

television network and the Company’s owned television stations and radio

4

operations driven by the soft advertising market, lower ratings and higher

primetime programming costs.

Disney’s share of operating income from cable television activities,

which consists of Disney’s cable networks and cable equity investments,

was $293 million for the quarter.

Excluding the gain from the sale of Eurosport in the prior-year

quarter, cable television results were up 2%, reflecting higher cable

network affiliate revenue and improved results from cable equity

investments, including Lifetime Television, The History Channel and E!

Entertainment Television. These increases were partially offset by the soft

advertising market, higher programming costs and higher costs associated

with the launch of international Disney Channels. Higher affiliate

revenues from the cable networks were driven by strong subscriber

growth, annual contractual rate adjustments and the conversion of the

Disney Channel from a premium to a basic service. Additionally, certain

European Disney Channel operations showed improvements.

Parks & Resorts

Parks & Resorts revenues for the quarter remained flat at $1.9 billion

and segment operating income decreased 1% to $560 million.

Parks & Resorts results reflected increased attendance, guest

spending and occupied room nights at the Disneyland Resort, due to the

addition of Disney’s California Adventure, Downtown Disney and the

Grand Californian Hotel, increased guest spending at Walt Disney World,

continued growth at the Disney Cruise Line, due to the success of the 7-day

cruise package, and cost savings at Walt Disney World. These increases

5

were offset by higher costs at the Disneyland Resort and decreased theme

park attendance and lower occupied room nights at Walt Disney World.

The decreased attendance and lower expenses at Walt Disney World

reflected the prior-year impact of the Millennium Celebration, which

concluded in December 2000. Reduced costs at Walt Disney World also

reflected productivity and other cost reduction initiatives.

Consumer Products

Consumer Products revenues for the quarter decreased 3% to $518

million and segment operating income increased 32% to $58 million.

The decline in revenue for the quarter is primarily due to declines in

comparative store sales at Disney Stores North America. Operating income

reflected cost reduction initiatives across all lines of business and favorable

comparable store sales at Disney Stores Europe, partially offset by the

impact of declines in comparative store sales at Disney Stores North

America.

Over the last nine months, the Company has formed a number of

alliances with companies such as Coca-Cola, Gillette and Kimberly-Clark in

children’s food and personal care, in addition to retailers K-Mart, J.C.

Penney and Wal-Mart Canada in children’s apparel. The Company

believes that these arrangements will position Consumer Products for

future growth.

Internet Group

Internet Group revenues for the quarter decreased 17% to $38

million; however, segment operating loss improved by 47% to $31 million.

Internet Group results for the quarter reflect improved operating

performance at the Disney-branded and ESPN-branded Web sites, the 6

impact of cost reduction efforts and the elimination of operating losses at

toysmart.com, due to its closure in June 2000. The improved operating

performance at the Disney-branded sites is primarily due to growth in

international licensing revenues and increased sales at

DisneyVacations.com resulting from an increase in travel bookings to

Disney destinations.

Corporate and Unallocated Shared Expenses

Corporate and unallocated shared expense increased 15% to $94

million for the quarter, reflecting costs associated with several strategic

initiatives designed to improve overall company-wide efficiency and start-

up costs for the Disney Club, which was launched in the first quarter of

2001.

Workforce Reduction

In March 2001, the Company announced that it would eliminate 4,000

full-time jobs through a combination of voluntary and involuntary

reductions. The reduction affected employees in all business units and

geographic regions. In connection with the reduction and related

restructuring initiatives, the Company incurred $95 million in severance

and other costs during the quarter. The Company expects that the

reduction plan will be substantially complete in the fourth quarter and,

over time, will generate in excess of $350 million in annual savings.

Net Interest Expense and Other

Net interest expense and other decreased 35% to $80 million for the

quarter, driven by lower interest rates and gains from sales of certain

investments.

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Equity in the Income of Investees

Income from equity investees increased 6% to $86 million for the

quarter, reflecting improved results from cable equity investments

including Lifetime Television, The History Channel and E! Entertainment

Television, partially offset by start-up losses incurred in connection with

new investments.

Conversion of Internet Group Common Stock

On March 30, 2001, the Company converted all of its outstanding

Internet Group common stock into Disney common stock, resulting in the

issuance of approximately 8.6 million shares of Disney common stock. For

the quarter and nine months ended June 30, 2001, Disney common stock as-

reported earnings reflect approximately 72% of Internet Group losses from

October 1, 2000 through January 28, 2001 (the last date prior to the

announcement of the conversion), and 100% thereafter.

In addition, the Company has ceased operations of the GO.com

portal business, which resulted in restructuring charges in the current nine

months.

Restructuring, Impairment and Workforce Reduction Related Charges

During the quarter and nine months, the Company recorded

restructuring and impairment charges on an as-reported basis, totaling

$138 million and $1.3 billion, respectively. The charges relate to workforce

reduction; the closure of GO.com and approximately 70 Disney Stores; the

closure of the Chicago DisneyQuest facility, including the write-down of its

fixed assets and leasehold improvements and lease termination costs, and

impairment write-downs for certain Internet investments. The second 8

quarter $862 million charge for closure of the GO.com portal business

includes a non-cash write-off of intangible assets totaling $820 million and

the Disney Store closure charge consists of lease termination costs; write-

downs of fixed assets, leasehold improvements and inventory, and other

related closure costs. Restructuring and impairment charges on a pro

forma basis exclude the impact of the GO.com closure.

See Table C for details of the restructuring and impairment charges

on both a pro forma and as-reported basis.

Accounting Changes

Effective October 1, 2000, the Company adopted AICPA Statement of

Position No. 00-2, Accounting by Producers or Distributors of Films

(SOP 00-2), and FASB Statement No. 133, Accounting for Derivative

Instruments and Hedging Activities (SFAS 133), and recorded one-time after-

tax charges for the adoption of the standards totaling $228 million (or $0.11

per share) and $50 million (or $0.02 per share), respectively.

FORWARD-LOOKING STATEMENTS

Management believes certain statements in this press release may

constitute “forward-looking statements” within the meaning of the Private

Securities Litigation Reform Act of 1995. These statements are made on the

basis of management’s views and assumptions regarding future events and

business performance as of the time the statements are made. Actual

results may differ materially from those expressed or implied. Such

differences may result from actions taken by the Company prior to its fiscal

2001 year end, including further restructuring or strategic initiatives and 9

actions relating to the Company’s strategic sourcing initiative, as well as

from developments beyond the Company’s control, including changes in

global economic conditions that may, among other things, affect the

international performance of the Company’s theatrical and home video

releases, television programming and consumer products and, in addition,

uncertainties associated with the Internet. Changes in domestic

competitive and economic conditions may also affect performance of all

significant Company businesses.

Editor’s Note: The Company makes available its quarterly earnings releases, annual

report to shareholders, fact book and SEC filings on its Investor Relations Web site

located at http://www.disney.com/investors

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The Walt Disney Company

PRO FORMA CONSOLIDATED STATEMENTS OF INCOME (unaudited; in millions, except per share data)

Three Months Ended

June 30 Nine Months Ended

June 30 2001 2000 2001 2000

Revenues $ 5,975 $ 6,034 $ 19,444 $ 19,249 Costs and expenses (4,947) (4,904) (16,317) (16,270)Amortization of intangible assets (145) (162) (441) (491)Gain on sale of businesses – 93 22 93 Net interest expense and other (80) (124) (287) (413)Equity in the income of investees 86 81 234 196 Restructuring and impairment charges (138) – (466) (61)Income before income taxes, minority interests and

the cumulative effect of accounting changes 751 1,018 2,189 2,303 Income taxes (339) (446) (1,012) (1,025)Minority interests (20) (42) (83) (86)Income before cumulative effect of accounting

changes 392 530 1,094 1,192 Cumulative effect of accounting changes:

Film accounting – – (228) – Derivative accounting – – (50) –

Net income $ 392 $ 530 $ 816 $ 1,192 Earnings per share before cumulative effect of

accounting changes (basic and diluted) $ 0.19 $ 0.25 $ 0.52 $ 0.57 Earnings per share including cumulative effect of

accounting changes (basic and diluted) (1) $ 0.19 $ 0.25 $ 0.39 $ 0.57 Earnings before cumulative effect of accounting

changes, excluding restructuring and impairment charges and gain on the sale of businesses $ 479 $ 495 $ 1,393 $ 1,190

Earnings per share before cumulative effect of

accounting changes, excluding restructuring and impairment charges and gain on the sale of businesses:

Diluted $ 0.23 $ 0.23 $ 0.66 $ 0.56 Basic $ 0.23 $ 0.24 $ 0.67 $ 0.57

Average number of common and common equivalent

shares outstanding: Diluted 2,107 2,123 2,108 2,108 Basic 2,091 2,086 2,090 2,078

(1) The per share impacts of the film and derivative accounting changes for the nine-month period were ($0.11)

and ($0.02), respectively.

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The Walt Disney Company

AS-REPORTED CONSOLIDATED STATEMENTS OF INCOME (unaudited; in millions, except per share data)

Three Months Ended

June 30 Nine Months Ended

June 30 2001 2000 2001 2000

Revenues $ 5,975 $ 6,053 $ 19,457 $ 19,300 Costs and expenses (4,947) (4,935) (16,363) (16,326) Amortization of intangible assets (145) (340) (622) (910) Gain on sale of businesses - 93 22 336 Net interest expense and other (80) (124) (287) (417) Equity in the income of investees 86 81 234 155 Restructuring and impairment charges (138) – (1,328) (61) Income before income taxes, minority interests and the

cumulative effect of accounting changes 751 828 1,113 2,077 Income taxes (339) (425) (963) (1,238) Minority interests (20) (42) (83) (86) Income before cumulative effect of accounting changes 392 361 67 753 Cumulative effect of accounting changes:

Film accounting – – (228) – Derivative accounting – – (50) –

Net income (loss) $ 392 $ 361 $ (211) $ 753 Earnings (loss) attributed to:

Disney Common Stock (1) $ 392 $ 440 $ (94) $ 957 Internet Group Common Stock - (79) (117) (204)

$ 392 $ 361 $ (211) $ 753 Earnings (loss) per share before cumulative effect of

accounting changes attributed to: Disney Common Stock (basic and diluted) (1) $ 0.19 $ 0.21 $ 0.09 $ 0.46 Internet Group Common Stock (basic and diluted) n/a $ (1.75) $ (2.72) $ (4.58)

Earnings (loss) per share including cumulative effect of accounting changes attributed to:

Disney Common Stock (1) (2) (3) Diluted $ 0.19 $ 0.21 $ (0.04) $ 0.46 Basic $ 0.19 $ 0.21 $ (0.05) $ 0.46

Internet Group Common Stock (basic and diluted) n/a $ (1.75) $ (2.72) $ (4.58)

Earnings attributed to Disney common stock before cumulative effect of accounting changes, excluding restructuring and impairment charges and gain on the sale of businesses $ 479 $ 405 $ 1,198 $ 934

Earnings per share attributed to Disney common stock before cumulative effect of accounting changes, excluding restructuring and impairment charges and gain on the sale of businesses (1)

Diluted $ 0.23 $ 0.19 $ 0.57 $ 0.44 Basic $ 0.23 $ 0.19 $ 0.57 $ 0.45

Average number of common and common equivalent shares outstanding:

Disney

Diluted 2,107 2,115 2,103 2,100 Basic 2,091 2,078 2,085 2,070

Internet Group (basic and diluted) - 45 43 44

(1) Including Disney’s retained interest in the Internet Group. Disney’s as-reported retained interest in the Internet Group reflects 100% of Internet Group losses through November 17, 1999, approximately 72% for the period from November 18, 1999 through January 28, 2001 (the last date prior to the announcement of the conversion of the Internet Group common stock) and 100% thereafter.

(2) Amounts for the current year nine-month period represent basic earnings per share. (3) The per share impacts of the film and derivative accounting changes for the nine month period were ($0.11) and ($0.02), respectively.

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THE WALT DISNEY COMPANY SEGMENT RESULTS

For the Quarter Ended June 30 (unaudited, in millions)

Pro Forma % As Reported 2001 2000 Change 2001 2000

Revenues: (3) Media Networks $ 2,135 $ 2,270 (6)% $ 2,135 $ 2,270 Parks & Resorts 1,942 1,940 n/m 1,942 1,940 Studio Entertainment 1,342 1,246 8 % 1,342 1,246 Consumer Products 518 532 (3)% 518 532 Internet Group 38 46 (17)% 38 65 $ 5,975 $ 6,034 (1)% $ 5,975 $ 6,053 Segment operating income (loss): (1) (3) Media Networks $ 470 $ 662 (29)% $ 470 $ 662 Parks & Resorts 560 565 (1)% 560 565 Studio Entertainment (2) 65 (1) n/m 65 (1) Consumer Products 58 44 32 % 58 44 Internet Group (31) (58) 47 % (31) (70) $ 1,122 $ 1,212 (7)% $ 1,122 $ 1,200

The Company evaluates the performance of its operating segments based on segment operating income. A reconciliation of segment operating income to income before income taxes and minority interests is as follows:

Pro Forma As Reported 2001 2000 2001 2000

Segment operating income $ 1,122 $ 1,212 $ 1,122 $ 1,200 Corporate and unallocated shared expenses (94) (82) (94) (82)Amortization of intangible assets (145) (162) (145) (340)Gain on sale of businesses - 93 - 93 Net interest expense and other (80) (124) (80) (124)Equity in the income of investees 86 81 86 81 Restructuring and impairment charges (138) - (138) - Income before income taxes and minority

interests $ 751 $ 1,018 $ 751 $ 828

(1) Segment earnings before interest, income taxes, depreciation and amortization (EBITDA) is as follows: Pro Forma As Reported 2001 2000 2001 2000

Media Networks $ 509 $ 697 $ 509 $ 697 Parks & Resorts 731 731 731 731 Studio Entertainment 76 11 76 11 Consumer Products 77 75 77 75 Internet Group (26) (55) (26) (62)

$ 1,367 $ 1,459 $ 1,367 $ 1,452

(2) Pro forma segment operating income has been adjusted to reflect the impact of SOP 00-2. The respective adjustments for the year will (decrease) increase segment operating income as follows:

Quarter ended December 31, 1999 $ (73) March 31, 2000 37 June 30, 2000 - September 30, 2000 (14) $ (50)

(3) The Company made certain changes to its business segment classifications. The Disney Store Catalog and the Disney Store Online, which were previously reported in the Internet Group, are now reported in the Consumer Products segment. Prior-year amounts have been reclassified to reflect the current-year presentation.

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THE WALT DISNEY COMPANY SEGMENT RESULTS

For the Nine Months Ended June 30 (unaudited, in millions)

Pro Forma % As Reported 2001 2000 Change 2001 2000

Revenues: (3) Media Networks $ 7,252 $ 7,420 (2)% $ 7,252 $ 7,420 Parks & Resorts 5,312 5,088 4 % 5,312 5,088 Studio Entertainment 4,765 4,511 6 % 4,765 4,511 Consumer Products 1,978 2,094 (6)% 1,978 2,108 Internet Group 137 136 1 % 150 173 $ 19,444 $ 19,249 1 % $ 19,457 $ 19,300 Segment operating income (loss): (1) (3) Media Networks $ 1,549 $ 1,838 (16)% $ 1,549 $ 1,838 Parks & Resorts 1,276 1,258 1 % 1,276 1,258 Studio Entertainment (2) 381 – n/m 381 36 Consumer Products 314 303 4 % 314 304 Internet Group (109) (190) 43 % (142) (230) $ 3,411 $ 3,209 6 % $ 3,378 $ 3,206

The Company evaluates the performance of its operating segments based on segment operating income. A reconciliation of segment operating income to income before income taxes, minority interests, and cumulative effect of accounting changes is as follows:

Pro Forma As Reported 2001 2000 2001 2000

Segment operating income $ 3,411 $ 3,209 $ 3,378 $ 3,206 Corporate and unallocated shared expenses (284) (230) (284) (232)Amortization of intangible assets (441) (491) (622) (910)Gain on sale of businesses 22 93 22 336 Net interest expense and other (287) (413) (287) (417)Equity in the income of investees 234 196 234 155 Restructuring and impairment charges (466) (61) (1,328) (61)Income before income taxes, minority interests,

and the cumulative effect of accounting changes $ 2,189 $ 2,303 $ 1,113 $ 2,077

(1) Segment EBITDA is as follows: Pro Forma As Reported 2001 2000 2001 2000

Media Networks $ 1,664 $ 1,942 $ 1,664 $ 1,942 Parks & Resorts 1,729 1,696 1,729 1,696 Studio Entertainment 416 40 416 76 Consumer Products 379 386 379 387 Internet Group (91) (183) (121) (209)

$ 4,097 $ 3,881 $ 4,067 $ 3,892

(2) Pro forma segment operating income has been adjusted to reflect the impact of SOP 00-2. The respective adjustments for the year will (decrease) increase segment operating income as follows:

Quarter ended December 31, 1999 $ (73) March 31, 2000 37 June 30, 2000 - September 30, 2000 (14) $ (50)

(3) The Company made certain changes to its business segment classifications. The Disney Store Catalog and the Disney Store Online, which were previously reported in the Internet Group, are now reported in the Consumer Products segment. Prior-year amounts have been reclassified to reflect the current-year presentation.

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Table A

MEDIA NETWORKS

(unaudited, in millions)

Quarter Ended June 30 2001 2000 % Change

Revenues: Broadcasting $ 1,321 $ 1,509 (12) % Cable Networks 814 761 7 % $ 2,135 $ 2,270 (6) % Segment operating income: (1) Broadcasting $ 244 $ 421 (42) % Cable Networks 226 241 (6) % $ 470 $ 662 (29) %

Nine Months Ended June 30 2001 2000 % Change

Revenues: Broadcasting $ 4,454 $ 4,876 (9) % Cable Networks 2,798 2,544 10 % $ 7,252 $ 7,420 (2) % Segment operating income: (1) Broadcasting $ 723 $ 1,010 (28) % Cable Networks 826 828 n/m $ 1,549 $ 1,838 (16) %

(1) Amounts exclude intangible asset amortization

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Table B

CABLE TELEVISION ACTIVITIES (unaudited, in millions)

Quarter Ended June 30 2001 2000 % Change

Operating income: Cable Networks $ 226 $ 241 (6) % Equity investments: A&E, Lifetime and E! Entertainment Television

206

183

13 %

Other (1) 52 124 (58) % 484 548 (12) % Partner share of operating income (191) (186) (3) % Disney share of operating income $ 293 $ 362 (19) %

Nine Months Ended June 30 2001 2000 % Change

Operating income: Cable Networks $ 826 $ 828 n/m Equity investments: A&E, Lifetime and E! Entertainment Television

560

501

12 %

Other (1) 166 175 (5) % 1,552 1,504 3 % Partner share of operating income (582) (504) (15) % Disney share of operating income $ 970 $ 1,000 (3) %

Note: Amounts presented in this table represent 100% of the operating income for all of the Company’s cable businesses. The Disney share of operating income represents the Company’s ownership interest in cable television operating income. Cable networks are reported in “Segment operating income” in the statements of income. Equity investments are accounted for under the equity method and the Company’s proportionate share of the net income of its cable equity investments is reported in “Equity in the income of investees” in the statements of income.

(1) Amounts include the gain on the sale of Eurosport in fiscal 2000. Excluding Disney’s share of the gain, cable television operating income for the quarter and nine months ended June 30, 2000 was $287 million and $925 million, respectively. Reflecting the adjustment for Eurosport in the prior year, Disney’s share of operating income from cable television activities increased 2% and 5% for the quarter and nine months, respectively.

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Table C

RESTRUCTURING AND IMPAIRMENT CHARGES (unaudited, in millions)

Pro Forma

As Reported Quarter Ended June 30 2001 2000 2001 2000 Workforce reductions and other $ 95 $ – $ 95 $ – Chicago DisneyQuest closure (1) 33 – 33 – Disney Store closures – – – – Investment impairment 10 – 10 – $ 138 $ – $ 138 $ –

Pro Forma

As Reported Nine Months Ended June 30 2001 2000 2001 2000 GO.com intangible assets impairment $ – $ – $ 820 $ – GO.com severance, fixed asset write-

offs and other

–

–

42

– Workforce reductions and other 95 – 95 – Chicago DisneyQuest closure (1) 94 – 94 – Disney Store closures 51 – 51 – Investment impairment 226 61 226 61 $ 466 $ 61 $ 1,328 $ 61

(1) The charge for the quarter ended June 30, 2001 reflects lease termination costs for the

closure of the Chicago DisneyQuest facility. The charge for the nine months includes a write-down to the estimated salvage value of the property and equipment at the facility.

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Table D

The following table provides a reconciliation of as-reported income (loss) per share

attributed to Disney common stock to pro forma earnings per share before the cumulative effect of accounting changes, excluding restructuring and impairment charges and gains on the sale of businesses.

Three Months Ended June 30,

Nine Months Ended June 30,

(unaudited) 2001 2000 2001 2000 As-reported income (loss) per share attributed to Disney common stock $ 0.19 $ 0.21 $ (0.04) $ 0.46

Adjustment to exclude restructuring and impairment charges attributed to Disney common stock 0.04 — 0.48 —

Adjustment to exclude gain on the sale of businesses — (0.02) — (0.02)

Adjustment to exclude the cumulative effect of accounting changes — — 0.13 —

As-reported earnings per share before the cumulative effect of accounting changes, excluding restructuring and impairment charges and gain on the sale of businesses 0.23 0.19 0.57 0.44

Adjustment to attribute 100% of Internet Group operating results to Disney common stock (72% included in as- reported amounts) — (0.04) (0.06) (0.10)

Adjustment to exclude pre-closure GO.com portal operating results and amortization of intangible assets — 0.09 0.09 0.26

Adjustment to exclude restructuring and impairment charges attributed to the Internet Group — — 0.06 0.01

Adjustment to include pre-acquisition Infoseek operating results — (0.01) — (0.04)

Adjustment to reflect the impact of the new Film Accounting rules — — — (0.01)

Pro forma earnings per share before the cumulative effect of accounting changes, excluding restructuring and impairment charges and gain on the sale of businesses $ 0.23 $ 0.23 $ 0.66 $ 0.56

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