The company’s ongoing efforts to reduce capital spending, drive revenue growth, optimize operating efficiencies, and closely manage our investment in working capital resulted in after-tax free cash flow² for 2003 of just under $1.9 billion. This figure, which represents an increase in excess of 50 percent over the prior year, is particularly noteworthy in light of the challenging economic environment prevailing in both 2002 and 2003.

Disney’s 2003 free cash flow allowed for a reduction in net debt in excess of 10 percent during the year.³ We continue to target further improvement in our credit statistics and will therefore seek to further reduce debt levels in 2004. We will continue to oversee the company’s overall debt portfolio with the primary objectives of ensuring current liquidity, balancing scheduled maturities over future periods, minimizing interest costs and limiting exposure to interest rate fluctuations to prudent levels.

²The Company defines "After Tax Free Cash Flow" as cash provided by operations less investment in parks, resorts and other property. For fiscal 2003, these amounts were $2,901 and $1,049 million, respectively. For fiscal 2002, the respective amounts were $2,286 and $1,086 million. After tax free cash flow is a non-GAAP financial metric. Please see the Company's Consolidated Statements of Cash Flows in the PDF version of this Annual Report.

³The company defines "Net Debt" as total borrowings less cash and cash equivalents. For fiscal 2003, these amounts were $13,100 and $1,583 million, respectively. For fiscal 2002, the respective amounts were $14,130 and #1,239 million. Net debt is a non-GAAP financial measure. Please see the Company's Consolidated Balance Sheets in the PDF version of this Annual Report.