• On a consolidated basis, both revenues and operating income decreased compared with the same period of the previous fiscal year. The decline was due to a drop in total attendance at the two theme parks caused by the impact of Expo 2005 held in Aichi, Japan from March to September and other factors. Operating expenses generated by the Palm & Fountain Terrace Hotel, which opened in February 2005, and increased production costs for entertainment events and shows in the Theme Park segment also constrained operating income.
• While actively seeking repayment of loans and redemption of bonds, long-term debt increased including ¥31,000 million to cover funding for the acquisition of treasury stock undertaken in June, and as a result, the outstanding balance of interest-bearing debt rose compared with the end of the previous fiscal year.

Revenues and Operating Income
Consolidated revenues for the interim period fell 0.6% compared with the same period of the previous fiscal year to ¥156,292 million (US$1,380.8 million). Consolidated operating income fell 20.4% to ¥11,382 million (US$100.6 million).



Theme Park Segment
Revenues fell 1.6% compared with the same period of the previous fiscal year to ¥129,238 million.
Total attendance at the two parks fell 3.1% compared with the same period of the previous fiscal year to 11,662 thousand guests. Despite aggressive business initiatives implemented at the two theme parks, including the introduction of the new attraction "Raging Spirits" at Tokyo DisneySea, attendance fell due to such factors as the impact of Expo 2005 Aichi Japan, which was held from March to September 2005.
Nevertheless, revenues per guest rose 1.2% to ¥9,152. The main factors for the increase were favorable sales of regular products at Tokyo Disneyland and of products related to special events at Tokyo DisneySea.
Operating income fell 13.4% to ¥9,739 million as decreased cost ratios for merchandise, food and beverages were countered by increases in entertainment and show production expenses due to the larger scale of special events and increases in personnel expenses due to changes in the personnel system for part-time employees.

Commercial Facilities Segment
Revenues fell 0.8% compared with the same period of the previous fiscal year to ¥10,711 million. Operating income fell 19.8% to ¥926 million. The decline was due to a slight decrease in occupancy rates at Disney Ambassador Hotel in the first quarter caused by a drop in theme park attendance.

Retail Business Segment
Revenues fell 6.9% compared with the same period of the previous fiscal year to ¥10,468 million. This was due to factors that included a decline in the number of store customers which was caused by a slight gap in preferences between the needs of higher spending customers and our product offerings. Operating income fell 64.1% to ¥512 million, due to such factors as increases in store repair costs and personnel costs.

Other Business Segment
Revenues rose 54.3% compared with the same period of the previous fiscal year to ¥5,875 million, as the Palm & Fountain Terrace Hotel, which opened in February 2005, contributed to results for the period. On the other hand, operating income fell 50.2% to ¥146 million, due to factors including higher operating expenses from increased animation production expenses in the intellectual property business as well as the operation of the Palm & Fountain Terrace Hotel.

 Pagetop

Consolidated net income decreased 23.3% compared with the same period of the previous fiscal year to ¥5,515 million (US$48.7 million). Despite incurring an extraordinary loss on employee retirement benefit expenses in connection with a change in the retirement benefit system, the company did not record the extraordinary loss on one-time payment of the excess of cost over book value of affiliated companies accounted for by the equity method that it recorded in the same period of the previous fiscal year.

Total assets at the end of the interim period were ¥644,463 million (US$5,693.6 million), a decrease of 2.4% from March 31, 2005.
Current assets were ¥77,183 million (US$681.9 million), a decrease of 13.9% from March 31, 2005, due to factors including a decrease in cash and time deposits in connection with the redemption of the fifth series of unsecured bonds (¥10,000 million) in April. Theme parks, resorts and other property, at cost totaled ¥514,189 million (US$4,542.7 million), down 1.3%, despite progress in the construction of new attractions, as depreciation and amortization of Tokyo Disney Resort facilities progressed.
Total liabilities were ¥279,018 million (US$2,465.0 million), an increase of 3.1% from March 31, 2005. Current liabilities were ¥83,551 million (US$738.1 million), an increase of 10.3% from March 31, 2005, due to the second series of unsecured bonds (¥30,000 million) being re-classified from non-current liabilities to current liabilities, while the company redeemed the fifth series of unsecured bonds. Non-current liabilities were ¥195,467 million (US$1,726.9 million), an increase of 0.4% from March 31, 2005, due to factors including an increase in long-term debt (¥31,000 million) to meet funding needs for the acquisition of treasury stock undertaken in June.
Total stockholders' equity was ¥365,342 million (US$3,227.7 million), down 6.2% from March 31, 2005, due to factors including a decrease in the number of outstanding shares as a result of the acquisition of treasury stock, despite an increase in retained earnings. The stockholders' equity ratio was 56.7%, down 2.3 percentage points from March 31, 2005.

Cash and cash equivalents at the end of the interim period decreased ¥15,851 million from the beginning of the period to ¥42,726 million (US$377.5 million).
Net cash provided by operating activities was ¥21,786 million (US$192.5 million), a decrease of ¥994 million compared with the same period of the previous fiscal year. This was mainly due to decreased net income before income taxes, while consumption taxes decreased.
Net cash used in investing activities was ¥21,338 million (US$188.5 million), a decrease of ¥27,635 million compared with the same period of the previous fiscal year. Due to the absence in the interim period of the sale and redemption of marketable securities to fund the redemption of bonds undertaken during the same period of the previous year, proceeds from the sale and redemption of marketable securities decreased. At the same time, expenditures for new investments in or for the renewal and improvement of Tokyo Disney Resort facilities increased compared with the same period of the previous fiscal year.
Net cash used in financing activities was ¥16,299 million (US$144.0 million), down ¥1,696 million compared with the same period of the previous fiscal year, due to the continuing steady redemption of bonds and repayment of debt, despite the absence of proceeds from the issuance of the sixth series of unsecured bonds that were recorded in the same period of the previous fiscal year.

 Pagetop