Disney Reports 80% Increase in ’87 Net Income : Sale of Realty Company; Strong Films, Parks Cited

Walt Disney Co. on Thursday reported net income of $444.7 million for the year ended Sept. 30, 1987, up 80% from the previous year, including a $26-million gain from the sale of Arvida Corp, the Florida-based real estate development company sold in September for $400 million.

Revenue rose 33% to $2.9 billion. The company reported fourth-quarter net income of $135.3 million on revenue of $758.6 million.

Debt, taxes and Disney’s original purchase cost of $214 million account for the difference between Arvida’s sale price and the net gain recorded, said Neil McCarthy, Disney’s vice president of planning and controls who worked on the deal.

The Disney official declined to say how much debt was associated with Arvida, but at the time of its acquisition in June, 1984, Disney assumed $190 million in Arvida debt.

McCarthy noted that Arvida generated about $130 million in earnings during its three-plus years as a Disney subsidiary.

As a result of the sale of Arvida assets to an affiliate of JMB Realty, Disney said it has discontinued its community development segment.

6 Successful Films

The remaining three segments showed strong gains.

Filmed entertainment reported the strongest percentage gain, with operating income of $130.6 million for the year, up 153% from $51.6 million in 1986. For the fourth quarter, the filmed entertainment segment rose 303% to $12.6 million.

Disney Vice President Erwin Okun said the division’s gains reflected six financially successful films released during the summer, including “Stakeout” and the re-release of “Snow White and the Seven Dwarfs.”

Theme parks and resorts, the largest business segment, reported a 36% increase in operating income to $548.9 million for the year. For the fourth-quarter, the segment reported operating income of $163.2 million, up 22% from $133.9 million in the same period a year ago.

Operating income for the consumer products segment rose 34% to $97.3 million for the year, up from $72.4 million.

Corporate expenses dropped sharply to $50.4 million for the fiscal year, down from $105.5 million a year earlier. The company attributed the decrease to a reduction in interest expense and higher investment and interest income.