Disney Recalculates Past Profits, Shows Boost

BURBANK, CA— Entertainment giant The Walt Disney Co. has revised a set of earnings calculations provided for 2000 and 2001, to exclude a goodwill charge that should have been stripped out due to a subsequent accounting change. The effect of fixing the error will almost double Disneys historically comparable earnings over the two years affected. A company spokesman emphasized the revision had no effect on Disneys as-reported earnings for either year. Disney made the fix at a sensitive time for publicly traded companies, which have come under intense scrutiny over their accounting practices. Disney said that in a June 17 filing with the Securities and Exchange Commission, a supplemental table showing pro forma earnings for the past three years had inadvertently included a charge associated with amortized goodwill from its Internet business. Disney and other companies last year adopted a new accounting standard eliminating the practice of routinely writing off goodwill over time, a practice known as amortization. Instead, companies must now write down the value of their investments when they judge that they have lost value. After stripping out all charges associated with the Internet Group, Disney reported pro forma fiscal 2001 earnings of $613 million, or $0.29 per share, compared with a previous figure of $358 million, or $0.17. The company said 2000 earnings with all Internet Group charges stripped out would have been $2.2 billion, or $1.03 per share, compared with a previous $1.6 billion, or $0.76. SOURCE: Reuters