The strong results achieved by Studio Entertainment in 2003 reflect our long-term objective of improving returns on investment. Since 1999, we have focused on reducing overall spending in our film business and have simultaneously established a system for evaluating film performance based primarily on returns on invested capital.

The impact of these efforts was evident in 2003. Studio operating income more than doubled over the prior year period, and represented a nearly five-fold increase compared with Fiscal Year 2000. Most importantly, based on our estimates of total revenues from our 2003 live action film slate across all distribution windows including international theatrical, home video and television distribution, we expect the ultimate return on our investment for fiscal 2003 live action films to be in excess of 20 percent.

We also seek to increase shareholder value by allocating capital and other resources based upon the potential to generate attractive returns for the company. The sale of the Anaheim Angels and the potential disposition of the Disney Stores and the Mighty Ducks hockey franchise are direct outgrowths of this discipline.