The Walt Disney Company Reports Results for the Fourth Quarter and Fiscal Year 2005

The Walt Disney Company (NYSE:DIS) today reportedearnings for the fourth quarter and fiscal year ended October 1, 2005.Diluted earnings per share (EPS) for the year were $1.24 before thecumulative effect of an accounting change relating to the valuation ofcertain FCC licenses. EPS for the year after the cumulative effect ofthe accounting change was $1.22. These results included, as previouslydisclosed, fair-value based stock option expense of $0.08 per share.EPS before the cumulative effect of the accounting change relating toFCC licenses and excluding the effect of the new stock option expenserule increased 18% to $1.32 for the year compared to $1.12 reported inthe prior year. Also included in both fiscal years are certain itemsas presented in Table A that had a favorable impact of $0.03 per shareon fiscal 2005 and $0.04 per share on fiscal 2004.

For the fourth quarter, EPS before the cumulative effect of theaccounting change relating to FCC licenses was $0.20. EPS after thecumulative effect of the accounting change for the quarter was $0.19.EPS before the cumulative effect of the accounting change and adjustedto exclude the effect of the new stock option expense rule decreased8% to $0.23 for the quarter from $0.25 reported in the prior yearquarter. However, also included in the fourth quarter of both fiscalyears are certain items presented in Table A, which had a favorableimpact of $0.03 per share in fiscal 2005 and $0.06 per share in fiscal2004.

"We are pleased to report another year of strong double-digitgrowth in earnings per share, providing further evidence that ourstrategy to achieve growth through great creative content, globalexpansion and the application of new technology is working," saidRobert Iger, President and CEO of The Walt Disney Company.

"Advances in technology have changed how content is created,distributed and consumed," continued Mr. Iger. "As a modern mediacompany Disney is well positioned to take advantage of these changesby continuing to develop strong content and leverage that contentacross our businesses and new technologies. Our agreement with Appleto make programming available on the iPOD is a fitting example of ourefforts in that regard. As the media landscape continues to change,our creative excellence and consumer focus will enable us to continuedelivering benefits to shareholders."

The following table summarizes the full year and fourth quarterresults for fiscal 2005 and 2004 (in millions, except per shareamounts):
Year Ended Quarter Ended
-------------------------- -----------------------------
Oct. 1, Sept. Oct. 1, Sept.
2005 30, % 2005 30, %
(2) 2004 Change (2)(3) 2004 Change
-------- -------- -------- ------------ ------- --------
Revenues $31,944 $30,752 4% $7,734 $7,543 3%
Segment
operating
income (1) $ 4,654 $ 4,488 4% $ 760 $ 899 (15)%
Income before
the
cumulative
effect of
accounting
change $ 2,569 $ 2,345 10% $ 415 $ 516 (20)%
Net income $ 2,533 $ 2,345 8% $ 379 $ 516 (27)%
Diluted EPS
before the
cumulative
effect of
accounting
change $ 1.24 $ 1.12 11% $ 0.20 $ 0.25 (20)%
Diluted EPS $ 1.22 $ 1.12 9% $ 0.19 $ 0.25 (24)%
Diluted EPS
before the
cumulative
effect and
adjusted to
exclude stock
option
expense (1) $ 1.32 $ 1.12 18% $ 0.23 $ 0.25 (8)%

(1) Aggregate segment operating income and earnings adjusted to
exclude the effect of the new stock option expense rule are not
financial measures defined by Generally Accepted Accounting
Principles (GAAP) in the United States (non-GAAP financial
measure). See the discussion of non-GAAP financial measures that
follows below.
(2) Fiscal 2005 includes stock option expense due to the adoption of
Statement of Financial Accounting Standards No. 123R, Share-Based
Payment.
(3) The cumulative effect of accounting change was $0.02 per share for
both the quarter and the year. The difference between EPS before
and after the cumulative effect of the accounting change for the
quarter does not equal $0.02 per share due to rounding.

Cash Flow

The Company generated $4.3 billion in cash flow from operations infiscal 2005 compared to $4.4 billion in fiscal 2004. Free cash flowfor fiscal 2005 totaled $2.4 billion compared to $2.9 billion infiscal 2004. The decrease was primarily due to an increase ininvestments in parks, resorts and other property, which increased to$1.8 billion from $1.4 billion, primarily due to an increase of $340million in spending at Hong Kong Disneyland. The prior year onlyincludes investments in parks, resorts and other property at EuroDisney and Hong Kong Disneyland for the six months commencing April 1,2004 when the Company began consolidating those entities.

Cash provided by operations and free cash flow are detailed below(in millions):
Year Ended
--------------------
Oct. 1, Sept. 30,
2005 2004 Change
--------- --------- ------
Cash provided by operations $ 4,269 $ 4,370 $ (101)
Investments in parks, resorts and
other property (1,823) (1,427) (396)
--------- --------- ------
Free cash flow (1) $ 2,446 $ 2,943 $ (497)
========= ========= ======

(1) Free cash flow is not a financial measure defined by GAAP. See the
discussion of non-GAAP financial measures that follows below.

Share Repurchases

During the fiscal year, the Company repurchased 91 million sharesfor $2.4 billion of which 42 million shares ($1.0 billion) wererepurchased in the fourth quarter. As of October 1, 2005, the Companyhad authorization in place to repurchase approximately 225 millionadditional shares, of which the Company has repurchased just under 40million shares for $959 million subsequent to year-end throughNovember 16, 2005.

Accounting Changes

Cumulative Effect of Accounting Change

The Company adopted Emerging Issues Task Force Topic D-108, Use ofthe Residual Method to Value Acquired Assets Other Than Goodwill(D-108), in the fourth quarter of fiscal 2005. D-108 requires that theCompany perform a direct valuation of FCC licenses that wereoriginally valued under the residual method. The direct valuation wasless than the recorded value of certain of our FCC licenses, and theCompany recorded a non-cash charge of $57 million ($36 millionafter-tax or $0.02 per share), as a cumulative effect of a change inaccounting principle.

Adoption of Stock Option Expense Accounting Rule

The Company began expensing employee stock options pursuant to theprovisions of Statement of Financial Accounting Standards No. 123R,Share-Based Payment (SFAS 123R), under the modified retrospectivemethod in the fourth quarter of fiscal 2005. Under the modifiedretrospective method the full-year results for fiscal 2005 are beingreported as though stock options had been expensed starting with thebeginning of fiscal 2005. The application of the modifiedretrospective method does not affect the financial statements forfiscal years prior to 2005. The first three quarters of fiscal 2005have been restated to reflect the adoption of SFAS 123R. The after-taxstock option expense impact for fiscal 2005 was $0.08 per share, ofwhich $0.02 relates to the fourth quarter. See Tables B and C forquarterly and full year operating results for fiscal 2005 adjusted toexclude the effect of adopting the new stock option expense rule.Fiscal 2005 results adjusted to exclude the impact of adopting SFAS123R is not a financial measure defined by GAAP. See the discussion ofnon-GAAP financial measures below.

Operating Results

Media Networks

Media Networks revenues for the year increased 12% to $13.2billion and segment operating income increased from $2.2 billion to$2.7 billion. Segment operating income, adjusted to exclude stockoption expense, increased 31% to $2.8 billion for the year. For thequarter, revenues increased 16% to $3.4 billion and segment operatingincome increased from $448 million to $632 million. Segment operatingincome, adjusted to exclude stock option expense, increased 47% to$659 million for the quarter. See Table D for further detail of MediaNetworks results.

Cable Networks

Operating income at Cable Networks increased from $1.92 billion to$2.29 billion for the year. Operating income, adjusted to excludestock option expense, increased 21% to $2.32 billion due to growth atESPN. The growth at ESPN was primarily due to an increase in affiliaterevenues resulting from higher contractual rates and subscriber growthand increased advertising revenues due to higher rates. Theseincreases were partially offset by higher general and administrativeexpenses, production costs and investments in new initiatives,including ESPN branded mobile phone service.

For the quarter, operating income at Cable Networks increased from$523 million to $584 million. Operating income, adjusted to excludestock option expense, increased 14% to $594 million driven by growthat ESPN, partially offset by a decline at ABC Family Channel due tohigher programming expenses. The increase at ESPN was driven by higheraffiliate revenue from increased contractual rates and recognition ofpreviously deferred revenues related to annual programmingcommitments, partially offset by higher general and administrativeexpenses and investments in new initiatives, including ESPN brandedmobile phone service.

Broadcasting

Operating income at Broadcasting increased from $245 million to$464 million for the year. Operating income, adjusted to exclude stockoption expense, increased by $283 million to $528 million primarilydue to improved performance at the ABC Television Network andTelevision Production and Distribution. The increase at the ABCTelevision Network was primarily due to higher primetime advertisingrevenue resulting from higher ratings and rates. The growth atTelevision Production and Distribution was driven by the syndicationof "My Wife and Kids" and international sales of "Lost" and "DesperateHousewives."

For the quarter, Broadcasting reported operating income of $48million compared to a loss of $75 million in the fourth quarter of2004. Operating income, adjusted to exclude stock option expense,increased by $140 million to $65 million primarily due to improvedperformance at Television Production and Distribution and the ABCTelevision Network. The growth at Television Production andDistribution was driven by the syndication of "My Wife and Kids." Theincrease at the ABC Television Network was driven by higher primetimeadvertising revenue from higher ratings.

Parks and Resorts

Parks and Resorts revenues for the year increased 16% to $9.0billion and segment operating income increased from $1.1 billion to$1.2 billion. The year included an extra six months of operations ofEuro Disney and Hong Kong Disneyland, as detailed below. Excluding theresults of Euro Disney and Hong Kong Disneyland for the first sixmonths of fiscal 2005 and excluding the impact of stock optionexpense, revenue grew 8% or $601 million, and segment operating incomeincreased 13% or $147 million for the year.

For the quarter, revenues increased 9% to $2.4 billion and segmentoperating income increased from $282 million to $309 million. Segmentoperating income for the quarter, adjusted to exclude the impact ofstock option expense, increased 14% to $321 million.

For the year and the quarter, operating income growth wasprimarily due to improvements at the Walt Disney World and DisneylandResorts, partially offset by increased pre-opening costs at Hong KongDisneyland.

Walt Disney World

Operating income growth at Walt Disney World for the year wasprimarily due to higher hotel occupancy and increased attendance andguest spending at the theme parks, partially offset by increasedcosts. Increased occupancy reflected increased visitation to theresort reflecting the ongoing recovery in travel and tourism and thepopularity of Disney as a travel destination and the availability ofadditional rooms in both the first and second quarters of the prioryear. Additionally, during the third quarter of fiscal 2005, theCompany launched two programs, Disney's Magical Express and ExtraMagic Hours, which are designed to increase occupancy at the WaltDisney World hotels. Increased attendance for the year was driven bythe Happiest Celebration on Earth promotion which celebrates the 50thanniversary of Disneyland. Higher guest spending at the theme parksreflected ticket price increases and fewer promotional offers comparedto the prior year. Higher costs at Walt Disney World for the year wereprimarily due to higher volume-related expenses, increased costsassociated with new attractions and service programs and informationtechnology, and higher fixed costs. For the quarter, operating incomegrowth was driven by increased sales at Disney's Vacation Club andhigher attendance, partially offset by lower guest spending at thetheme parks.

Disneyland Resort

Operating income growth at the Disneyland Resort for both the yearand the quarter was primarily due to higher guest spending and themepark attendance, partially offset by higher costs. Higher guestspending and theme park attendance were primarily due to increasedticket prices and the 50th anniversary celebration, respectively.Higher costs were primarily due to increased volume-related expenses,marketing and sales costs, and fixed costs.

Euro Disney and Hong Kong Disneyland

The Company began consolidating the results of Euro Disney andHong Kong Disneyland at the beginning of the third quarter of fiscal2004. Fiscal 2005 therefore reflected a full year of operations ofthese entities compared to only six months in fiscal 2004. The impactof an additional six months of operations in fiscal 2005 accounted fora $672 million increase, or 8%, in Parks and Resorts revenue and adecrease of $50 million in operating income for the year. See TablesF, G and H for the impact of consolidating Euro Disney and Hong KongDisneyland.

Studio Entertainment

Studio Entertainment revenues for the year decreased 13% to $7.6billion and segment operating income decreased from $662 million to$207 million. Segment operating income, adjusted to exclude stockoption expense, decreased $414 million to $248 million for the year.For the quarter, revenues decreased 20% to $1.5 billion and segmentoperating income decreased to a loss of $313 million. Segmentoperating income, adjusted to exclude stock option expense, decreased$327 million to a loss of $304 million for the quarter.

Lower segment operating income for the year was primarily due to adecline in worldwide home entertainment (home video), partially offsetby an improvement in domestic theatrical motion picture distributionand lower film cost write-downs.

The decline in worldwide home entertainment was due to an overalldecline in unit sales resulting from a lower performing slate ofcurrent year titles, including a decline in the ratio of home videounit sales to the related total domestic box-office results forfeature films. Successful current year titles included Disney/Pixar's"The Incredibles" and "National Treasure," while the prior yearincluded Disney/Pixar's "Finding Nemo," "Pirates of the Caribbean" and"The Lion King" Platinum Release.

The improvement in domestic theatrical motion picture distributionwas due to the stronger performances of current year titles, whichincluded "The Incredibles," "National Treasure" and "The Pacifier," ascompared to the prior year, which included "Home on the Range," "TheAlamo" and "King Arthur."

Lower results for the quarter were driven by a decline at Miramax,lower unit sales in worldwide home entertainment and higher film costwrite-downs. The decline at Miramax was primarily due to an increasednumber of releases in the domestic theatrical market, where losses aretypically incurred, coupled with disappointing results for a number ofthose titles.

Consumer Products

Consumer Products revenues for the year decreased 15% to $2.1billion and segment operating income decreased from $534 million to$520 million. Segment operating income, adjusted to exclude stockoption expense, increased 1% to $540 million for the year. Revenuesfor the quarter decreased 16% to $519 million and segment operatingincome decreased from $146 million to $132 million. Segment operatingincome, adjusted to exclude stock option expense, decreased 6% to $137million for the quarter.

The overall decline in segment revenue was primarily due to thesale of The Disney Store North America in November 2004. The increasein operating income for the year was primarily due to growth inMerchandise Licensing, partially offset by a decrease at The DisneyStore. The Merchandise Licensing increase was due to higher licenseesales across all lines of business and the recognition of contractualminimum guarantee revenues. The decrease at The Disney Store was dueto the sale of the North American stores and a decline at The DisneyStore Europe driven by softness in the United Kingdom retail market.

Lower segment operating income for the quarter was due toincreased product development spending at Buena Vista Games, the saleof The Disney Store North America and a decline at The Disney StoreEurope. These declines were partially offset by an increase atMerchandise Licensing due to the recognition of contractual minimumguarantee revenues and higher licensee sales across all lines ofbusiness.

Corporate and Unallocated Shared Expenses

Corporate and unallocated shared expenses increased from $428million to $536 million for the year and from $144 million to $157million for the quarter. Corporate and unallocated shared expenses,adjusted to exclude stock option expense, increased 14% to $486million for the year and were flat at $144 million for the quarter.The increase for the year was primarily due to favorable developmentsin legal matters that reduced expenses in the prior year.

Net Interest Expense

Net interest expense was as follows (in millions):
Quarter
Year Ended Ended
------------- -------------
Oct. Sept. Oct. Sept.
1, 30, 1, 30,
2005 2004 2005 2004
------ ------ ------ ------
Interest expense $(605) $(629) $(149) $(167)
Delta Air Lines, Inc. leveraged lease
investment write-off (101) (16) (101) (16)
Interest and investment income 48 28 17 12
Gain on restructuring of Euro Disney debt 61 - - -
------ ------ ------ ------
Net interest expense $(597) $(617) $(233) $(171)
====== ====== ====== ======

Net interest expense for the current year included a $101 millionwrite-off of our leveraged lease investment in Delta Air Lines, Inc.in the fourth quarter and a gain on Euro Disney's debt restructuringin the second quarter. Excluding these items, net interest expensedecreased for the year and quarter primarily due to lower average debtbalances, partially offset by higher effective interest rates.

Equity in the Income of Investees

Income from equity investees, consisting primarily of A&ETelevision Network, Lifetime Television and E! EntertainmentTelevision, increased 30% to $483 million for the year and 67% to $120million for the quarter. The increase for the year was due to theabsence of equity losses from Euro Disney which was accounted forunder the equity method through the second quarter of fiscal year 2004and higher affiliate revenue at Lifetime Television. The currentquarter increase was due to higher revenues at Lifetime Television.

Income Taxes

The effective income tax rate was 31.1% for the year and 3.3% forthe quarter compared to 32.0% and 10.0% for the prior year andprior-year quarter, respectively. The effective tax rate reflected therelease of reserves as a result of the favorable resolution of certaintax matters in the fourth quarter of both fiscal 2005 and fiscal 2004and in the first quarter of fiscal 2005. The effective tax rates forthe current year and current quarter were also favorably impacted by aone-time deduction permitted under the American Jobs Creation Act of2004 related to the repatriation of foreign earnings. Excluding thesebenefits, the effective income tax rate was 35.1% and 35.2% for theyear and prior year, respectively.

Reporting Period Change

Effective with the beginning of fiscal 2005 and in connection withthe completion of the Company's implementation of new company-wideaccounting systems in late fiscal 2004, the Company changed itsreporting period from a calendar period end to a period end thatcoincides with the cut off of the Company's accounting systems. Theaccounting systems cut off on the Saturday closest to the calendarquarter end. Accordingly, the fourth quarter of fiscal 2005 began onJuly 3, 2005 and ended on October 1, 2005, whereas the fourth quarterof the prior year began on July 1, 2004 and ended on September 30,2004. Therefore, there was one less reporting day for the current-yearquarter which had an unfavorable diluted earnings per share impact ofapproximately $0.01 on quarter-over-quarter earnings comparisons. Thenumber of reporting days for the fiscal years was the same.

Borrowings

Total borrowings and net borrowings are detailed below (inmillions):
Oct. 1, Sept. 30,
2005 2004 Change
---------- ---------- --------
Current portion of borrowings (1) $ 2,310 $ 4,093 $(1,783)
Long-term borrowings (1) 10,157 9,395 762
---------- ---------- --------
Total borrowings 12,467 13,488 (1,021)
Less: cash and cash equivalents (1,723) (2,042) 319
---------- ---------- --------
Net borrowings (2) $ 10,744 $ 11,446 $ (702)
========== ========== ========

(1) The decrease in the current portion of borrowings is primarily due
to the reclassification of Euro Disney's debt of $2.2 billion in
the second quarter from short-term to long-term consistent with
the terms of the Euro Disney financial restructuring as the debt
is no longer subject to acceleration by the lenders.
(2) Net borrowings is not a financial measure defined by GAAP. See the
discussion of non-GAAP financial measures that follows.

The decrease in net borrowings was due to the repayment ofmaturing medium-term notes, partially offset by increased commercialpaper borrowings. The total borrowings shown above include $2,953million and $2,766 million attributable to Euro Disney and Hong KongDisneyland as of October 1, 2005 and September 30, 2004, respectively.Cash and cash equivalents attributable to Euro Disney and Hong KongDisneyland totaled $535 million and $312 million as of October 1, 2005and September 30, 2004, respectively.

Capital Expenditures

Investments in parks, resorts and other property by segment are asfollows (in millions):
Year Ended
-------------------
Oct. 1, Sept. 30,
2005 2004
-------- ---------
Media Networks $ 228 $ 221
Parks and Resorts:
Domestic 726 719
International(1) 711 289
Studio Entertainment 37 39
Consumer Products 10 14
Corporate and unallocated 111 145
-------- ---------
$ 1,823 $ 1,427
======== =========

(1) Represents 100% of Euro Disney and Hong Kong Disneyland's capital
expenditures for all periods since the Company began consolidating
the results of operations and cash flows of these two businesses
beginning April 1, 2004.

Non-GAAP Financial Measures

This earnings release presents net borrowings, free cash flow,aggregate segment operating income and earnings information for fiscal2005 adjusted to exclude the effect of the new stock option expenserule, all of which are important financial measures for the Companybut are not GAAP-defined measures.

Net borrowings - The Company believes that information about netborrowings provides investors with a useful perspective on ourfinancial condition. Net borrowings reflect the subtraction of cashand cash equivalents from total borrowings. Since we earn interestincome on our cash balances that offsets a portion of the interestexpense we pay on our borrowings, net borrowings can be used as ameasure to gauge net interest expense. In addition, a portion of ourcash and cash equivalents is available to repay outstandingindebtedness when the indebtedness matures or when other circumstancesarise. However, we may not immediately apply cash and cash equivalentsto the reduction of debt, nor do we expect that we would use all ofour available cash and cash equivalents to repay debt in the ordinarycourse of business.

Free cash flow - The Company uses free cash flow (cash flow fromoperations less investments in parks, resorts and other property),among other measures, to evaluate the ability of its operations togenerate cash that is available for purposes other than capitalexpenditures. Management believes that information about free cashflow provides investors with an important perspective on the cashavailable to service debt, make strategic acquisitions and investmentsand pay dividends or repurchase shares.

Aggregate segment operating income - The Company evaluates theperformance of its operating segments based on segment operatingincome, and management uses aggregate segment operating income as ameasure of the performance of operating businesses separate fromnon-operating factors. The Company believes that information aboutaggregate segment operating income assists investors by allowing themto evaluate changes in the operating results of the Company'sportfolio of businesses separate from non-operational factors thataffect net income, thus providing separate insight into bothoperations and the other factors that affect reported results.

Earnings information for fiscal 2005 adjusted to exclude theeffect of the new stock option expense rule - The Company's adoptionof SFAS 123R on a modified retrospective basis for fiscal 2005 meansthat the fiscal 2005 GAAP results for each quarter and for the year asa whole are not comparable to the GAAP results for fiscal 2004,because the GAAP results for fiscal 2005 include stock option expenseon a fair value basis, but the results for fiscal 2004 do not. TheCompany uses earnings information for fiscal 2005 adjusted to excludethe effect of the new stock option expense rule to provide acomparable basis for evaluating changes in the operations of eachsegment between fiscal years 2004 and 2005 and for the Company as awhole. The Company believes that providing a comparable basis assistsit in assessing the Company's performance and in planning, forecastingand analyzing future periods. The Company believes this measure isuseful to investors in allowing for greater transparency with respectto supplemental information used by management in its financial andoperational decision making.

These measures should be reviewed in conjunction with the relevantGAAP financial measures and are not presented as alternative measuresof borrowings, cash flow or net income as determined in accordancewith GAAP. Net borrowings, free cash flow, aggregate segment operatingincome and earnings information for fiscal 2005 adjusted to excludethe effect of the new stock option expense rule as we have calculatedthem may not be comparable to similarly titled measures reported byother companies.

FORWARD-LOOKING STATEMENTS

Management believes certain statements in this earnings releasemay constitute "forward-looking statements" within the meaning of thePrivate Securities Litigation Reform Act of 1995. These statements aremade on the basis of management's views and assumptions regardingfuture events and business performance as of the time the statementsare made and management does not undertake any obligation to updatethese statements. Actual results may differ materially from thoseexpressed or implied. Such differences may result from actions takenby the Company, including restructuring or strategic initiatives(including capital investments or asset acquisitions or dispositions),as well as from developments beyond the Company's control, includinginternational, political, health concern, weather related and militarydevelopments, technological developments and changes in domestic andglobal economic conditions, competitive conditions and consumerpreferences. Such developments may affect travel and leisurebusinesses generally and may, among other things, affect theperformance of the Company's theatrical and home entertainmentreleases, the advertising market for broadcast and cable televisionprogramming, expenses of providing medical and pension benefits,demand for our products and performance of some or all companybusinesses either directly or through their impact on those whodistribute our products.

Additional factors are set forth in the Company's Annual Report onForm 10-K for the year ended September 30, 2004 under the heading"Factors that may affect forward-looking statements."
The Walt Disney Company
CONSOLIDATED STATEMENTS OF INCOME
(unaudited; in millions, except per share data)

Year Ended Quarter Ended
------------------- -----------------
Oct. Sept. Oct. Sept.
1, 30, 1, 30,
2005 2004 2005 2004
--------- --------- -------- --------

Revenues $ 31,944 $ 30,752 $ 7,734 $ 7,543

Costs and expenses (27,837) (26,704) (7,134) (6,792)

Gain on sale of businesses and
restructuring and impairment
charges (6) (64) (6) (5)

Net interest expense (597) (617) (233) (171)

Equity in the income of investees 483 372 120 72
--------- --------- -------- --------

Income before income taxes,
minority interests and the
cumulative effect of accounting
change 3,987 3,739 481 647

Income taxes (1,241) (1,197) (16) (65)

Minority interests (177) (197) (50) (66)
--------- --------- -------- --------

Income before the cumulative
effect of accounting change 2,569 2,345 415 516

Cumulative effect of accounting
change (36) - (36) -
--------- --------- -------- --------

Net income $ 2,533 $ 2,345 $ 379 $ 516
========= ========= ======== ========

Earnings per share before the
cumulative effect of accounting
change:
Diluted(1)(2) $ 1.24 $ 1.12 $ 0.20 $ 0.25
========= ========= ======== ========

Basic $ 1.27 $ 1.14 $ 0.21 $ 0.25
========= ========= ======== ========

Earnings per share:
Diluted(1)(2) $ 1.22 $ 1.12 $ 0.19 $ 0.25
========= ========= ======== ========

Basic $ 1.25 $ 1.14 $ 0.19 $ 0.25
========= ========= ======== ========

Average number of common and
common equivalent shares
outstanding:
Diluted 2,089 2,106 2,053 2,105
========= ========= ======== ========

Basic 2,028 2,049 1,995 2,050
========= ========= ======== ========

(1) The calculation of diluted earnings per share assumes the
conversion of the Company's convertible senior notes issued in
April 2003, and adds back interest expense (net of tax) of $21
million and $5 million for the year and quarter ended October 1,
2005, respectively, and $21 million and $6 million for the year
and quarter ended September 30, 2004, respectively.
(2) The cumulative effect of accounting change was $0.02 per share for
both the quarter and the year. The difference between EPS before
and after the cumulative effect of the accounting change for the
quarter does not equal $0.02 per share due to rounding.


The Walt Disney Company
SEGMENT RESULTS
(unaudited, in millions)

Year Ended Quarter Ended
------------------ ---------------
Oct. Sept. Oct. Sept.
1, 30, % 1, 30, %
2005 2004 Growth 2005 2004 Growth
-------- -------- ------ ------- ------- ------
Revenues:
Media Networks $13,207 $11,778 12 % $3,352 $2,887 16 %
Parks and Resorts 9,023 7,750 16 % 2,360 2,162 9 %
Studio Entertainment 7,587 8,713 (13)% 1,503 1,876 (20)%
Consumer Products 2,127 2,511 (15)% 519 618 (16)%
-------- -------- ------- -------
$31,944 $30,752 4 % $7,734 $7,543 3 %
======== ======== ======= =======
Segment operating
income (loss):
Media Networks $ 2,749 $ 2,169 27 % $ 632 $ 448 41 %
Parks and Resorts 1,178 1,123 5 % 309 282 10 %
Studio Entertainment 207 662 (69)% (313) 23 nm
Consumer Products 520 534 (3)% 132 146 (10)%
-------- -------- ------- -------
$ 4,654 $ 4,488 4 % $ 760 $ 899 (15)%
======== ======== ======= =======

The Company evaluates the performance of its operating segments based
on segment operating income. A reconciliation of segment operating
income to income before income taxes, minority interests and the
cumulative effect of accounting change is as follows:

Year Ended Quarter Ended
--------------- -------------
Oct. Sept. Oct. Sept.
1, 30, 1, 30,
2005 2004 2005 2004
------- ------- ------ ------
Segment operating income $4,654 $4,488 $ 760 $ 899
Corporate and unallocated shared expenses (536) (428) (157) (144)
Amortization of intangible assets (11) (12) (3) (4)
Gain on sale of businesses and
restructuring and impairment charges (6) (64) (6) (5)
Net interest expense (597) (617) (233) (171)
Equity in the income of investees 483 372 120 72
------- ------- ------ ------
Income before income taxes, minority
interests and the cumulative effect of
accounting change $3,987 $3,739 $ 481 $ 647
======= ======= ====== ======

Depreciation expense is as follows:

Year Ended Quarter Ended
-------------------- -------------------
October September October September
1, 30, 1, 30,
2005 2004 2005 2004
--------- ---------- --------- ---------
Media Networks $ 182 $ 172 $ 49 $ 48
Parks and Resorts
Domestic 756 710 178 170
International(1) 207 95 58 47
Studio Entertainment 26 22 6 8
Consumer Products 25 44 5 6
--------- ---------- --------- ---------
Segment depreciation expense 1,196 1,043 296 279
Corporate 132 155 34 47
--------- ---------- --------- ---------
Total depreciation expense $ 1,328 $ 1,198 $ 330 $ 326
========= ========== ========= =========

Segment depreciation expense is included in segment operating income
and corporate depreciation expense is included in corporate and
unallocated shared expenses.

(1) Represents 100% of Euro Disney and Hong Kong Disneyland's
depreciation expense for all periods since the Company began
consolidating the results of operations and cash flows of these
two businesses beginning April 1, 2004.


The Walt Disney Company
CONSOLIDATED BALANCE SHEETS
(unaudited, in millions, except per share data)

October September
1, 30,
2005 2004
---------- ----------
ASSETS
Current assets
Cash and cash equivalents $ 1,723 $ 2,042
Receivables 4,585 4,558
Inventories 626 775
Television costs 510 484
Deferred income taxes 749 772
Other current assets 652 738
---------- ----------
Total current assets 8,845 9,369
Film and television costs 5,427 5,938
Investments 1,226 1,292
Parks, resorts and other property, at cost
Attractions, buildings and equipment 27,570 25,168
Accumulated depreciation (12,605) (11,665)
---------- ----------
14,965 13,503
Projects in progress 874 1,852
Land 1,129 1,127
---------- ----------
16,968 16,482
Intangible assets, net 2,731 2,815
Goodwill 16,974 16,966
Other assets 987 1,040
---------- ----------
$ 53,158 $ 53,902
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and other accrued
liabilities $ 5,339 $ 5,623
Current portion of borrowings 2,310 4,093
Unearned royalties and other advances 1,519 1,343
---------- ----------
Total current liabilities 9,168 11,059
Borrowings 10,157 9,395
Deferred income taxes 2,430 2,950
Other long-term liabilities 3,945 3,619
Minority interests 1,248 798
Commitments and contingencies
Shareholders' equity
Preferred stock, $.01 par value
Authorized - 100 million shares, Issued -
none -- --
Common stock, $.01 par value
Authorized - 3.6 billion shares, Issued -
2.2 billion shares at October 1, 2005 and
2.1 billion shares at September 30, 2004 13,288 12,447
Retained earnings 17,775 15,732
Accumulated other comprehensive loss (572) (236)
---------- ----------
30,491 27,943
Treasury stock, at cost, 192.8 million shares
at October 1, 2005 and 101.6 million shares
at September 30, 2004 (4,281) (1,862)
---------- ----------
26,210 26,081
---------- ----------
$ 53,158 $ 53,902
========== ==========


The Walt Disney Company
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)

Year Ended
-------------------
October September
1, 30,
2005 2004
-------- ---------
OPERATING ACTIVITIES
Net income $ 2,533 $ 2,345
-------- ---------

Depreciation and amortization 1,339 1,210
Deferred income taxes (262) (98)
Equity in the income of investees (483) (372)
Cash distributions received from equity
investees 402 408
Restructuring and impairment charges -- 52
Write-off of aircraft leveraged lease 101 16
Cumulative effect of accounting change 36 ---
Minority interests 177 197
Amortization of film and television production
costs 3,243 3,018
Film and television production spending (2,631) (2,610)
Amortization of television programming costs 3,668 3,610
Television programming spending (3,712) (3,693)
Other, net 213 23
Changes in operating assets and
liabilities:
Receivables (157) (16)
Inventories 22 (40)
Other current assets 3 (89)
Other noncurrent assets (88) (58)
Accounts payable and other accrued
liabilities 80 315
Other noncurrent liabilities (337) 245
Income taxes 122 (93)
-------- ---------
Cash provided by operations 4,269 4,370
-------- ---------

INVESTING ACTIVITIES
Investments in parks, resorts and other
property (1,823) (1,427)
Working capital proceeds from The Disney Store
North America sale 100 --
Other 32 (57)
-------- ---------
Cash used by investing activities (1,691) (1,484)
-------- ---------

FINANCING ACTIVITIES
Commercial paper borrowings, net 654 100
Borrowings 422 176
Reduction of borrowings (1,775) (2,479)
Repurchases of common stock (2,420) (335)
Dividends (490) (430)
Equity partner contributions 147 66
Euro Disney equity offering 171 -
Exercise of stock options and other 394 201
-------- ---------
Cash used by financing activities (2,897) (2,701)
-------- ---------

(Decrease) increase in cash and cash equivalents (319) 185
Cash and cash equivalents due to the initial
consolidation of Euro Disney and Hong Kong
Disneyland -- 274
Cash and cash equivalents, beginning of period 2,042 1,583
-------- ---------
Cash and cash equivalents, end of period $ 1,723 $ 2,042
======== =========


Table A
The Walt Disney Company
IMPACT OF CERTAIN ITEMS ON EARNINGS PER SHARE
(unaudited, in millions, except per share data)

The following tables present the impact of certain items included
in our Consolidated Statement of Income:

Fiscal Year 2005
-------------------------------
Favorable/(Unfavorable) Impact To Full Year Fourth Quarter
-------------------------------------- --------------- ---------------
Net Net
Income EPS Income EPS
------- ------- ------- -------
Benefit from the resolution of certain
income tax matters $126 $0.06 $102 $0.05
Benefit from the restructuring of Euro
Disney's borrowings 38 0.02 - -
Income tax benefit from the
repatriation of foreign earnings
under the American Jobs Creation Act 32 0.02 32 0.02
Gain on the sale of the Mighty Ducks
of Anaheim 16 0.01 - -
Write-off of investment in Delta Air
Lines, Inc. leveraged leases (68) (0.03) (68) (0.03)
Write-down related to MovieBeam
venture (35) (0.02) - -
Impairment charge for a cable
television investment in Latin
America (20) (0.01) - -
Restructuring and impairment charges
related to the sale of The Disney
Store North America (20) (0.01) (4) -
------- ------- ------- -------
Total (1) $69 $0.03 $62 $0.03
======= ======= ======= =======


Fiscal Year 2004
------------------------------
Favorable/(Unfavorable) Impact To Full Year Fourth Quarter
--------------------------------------- --------------- --------------
Net Net
Income EPS Income EPS
------- ------- ------- ------
Benefit from the resolution of certain
income tax matters $120 $0.06 $120 $0.06
Restructuring and impairment charges
related to the sale of The Disney
Store North America (40) (0.02) (3) -
------- ------- ------- ------
Total $80 $0.04 $117 $0.06
======= ======= ======= ======

(1) Total EPS impact does not equal the sum of the column due to
rounding.


Table B
The Walt Disney Company
OPERATING RESULTS ADJUSTED TO EXCLUDE
THE EFFECT OF THE NEW STOCK OPTION EXPENSE RULE
(unaudited, in millions, except per share data)

The following table presents operating results for fiscal 2005
adjusted to exclude the effect of the new stock option expense rule
compared to operating results for fiscal 2004:

Year Ended
----------------------
Oct. 1, Sept. 30,
2005 2004
(As (As
Adjusted) Reported) Growth
(1) %
---------- ----------- ------
Segment operating income:
Media Networks
Cable Networks $ 2,321 $ 1,924 21 %
Broadcasting 528 245 nm
---------- ----------
Total Media Networks 2,849 2,169 31 %

Parks and Resorts 1,220 1,123 9 %
Studio Entertainment 248 662 (63)%
Consumer Products 540 534 1 %
---------- ----------
4,857 4,488 8 %

Corporate and unallocated shared
expenses (486) (428) 14 %
Other (308) (518) (41)%
---------- ----------
Income before income taxes and the
cumulative effect of accounting
change 4,063 3,542 15 %
Income taxes (1,334) (1,197) 11 %
---------- ----------
Income before the cumulative effect of
accounting change 2,729 2,345 16 %
Cumulative effect of accounting change (36) - nm
---------- ----------
Net income $ 2,693 $ 2,345 15 %
========== ==========

Diluted EPS before the cumulative
effect of accounting change $ 1.32 $ 1.12 18 %
========== ==========
Diluted EPS $ 1.30 $ 1.12 16 %
========== ==========


Quarter Ended
----------------------
Oct. 1, Sept. 30,
2005 2004
(As (As
Adjusted) Reported) Growth
(1) %
---------- ---------- ------
Segment operating income:
Media Networks
Cable Networks $ 594 $ 523 14 %
Broadcasting 65 (75) nm
---------- ----------
Total Media Networks 659 448 47 %

Parks and Resorts 321 282 14 %
Studio Entertainment (304) 23 nm
Consumer Products 137 146 (6)%
---------- ----------
813 899 (10)%

Corporate and unallocated shared
expenses (144) (144) - %
Other (172) (174) (1)%
---------- ----------
Income before income taxes and the
cumulative effect of accounting change 497 581 (14)%
Income taxes (40) (65) (38)%
---------- ----------
Income before the cumulative effect of
accounting change 457 516 (11)%
Cumulative effect of accounting change (36) - nm
---------- ----------
Net income $ 421 $ 516 (18)%
========== ==========

Diluted EPS before the cumulative effect
of accounting change $ 0.23 $ 0.25 (8)%
========== ==========
Diluted EPS $ 0.21 $ 0.25 (16)%
========== ==========

(1) Operating results for fiscal 2005 adjusted to exclude the effect
of the new stock option expense rule is not a financial measure
defined by GAAP. See the discussion of non-GAAP financial
measures. See Table C for a reconciliation of these results to the
"as reported" results.


Table C
The Walt Disney Company
RECONCILIATION OF "FISCAL 2005 AS REPORTED" TO "FISCAL 2005 AS
ADJUSTED TO EXCLUDE THE EFFECT OF THE NEW STOCK OPTION EXPENSE RULE"
(unaudited, in millions, except per share data)

The purpose of the following three tables is to reconcile "Fiscal
2005 As Reported" to "Fiscal 2005 As Adjusted To Exclude The Effect Of
The New Stock Option Expense Rule." Table 1 - Fiscal 2005 As Reported,
less Table 2 - Stock Option Expense Impact, equals Table 3 - Fiscal
2005 As Adjusted To Exclude The Effect Of The New Stock Option Expense
Rule.

Table 1 presents quarterly and full year operating results for
fiscal 2005 reflecting the adoption of SFAS 123R:

Table 1 - Fiscal Year
2005 As Reported
Including Stock Option
Expense Impact Year
---------------------- Ended
Oct. 1,
Q1 Q2 Q3 Q4 2005
------- ------- ------- ------ --------
Segment operating income:
Media Networks
Cable Networks $ 319 $ 662 $ 720 $ 584 $ 2,285
Broadcasting 125 38 253 48 464
------ ------ ------ ----- -------
Total Media Networks 444 700 973 632 2,749

Parks and Resorts 249 183 437 309 1,178
Studio Entertainment 323 241 (44) (313) 207
Consumer Products 226 106 56 132 520
------- ------- ------- ------ --------
1,242 1,230 1,422 760 4,654

Corporate and unallocated
shared expenses (124) (118) (137) (157) (536)
Other (60) (41) (35) (172) (308)
------- ------- ------- ------ --------
Income before income
taxes and the cumulative
effect of accounting
change 1,058 1,071 1,250 431 3,810
Income taxes (372) (414) (439) (16) (1,241)
-------- -------- -------- ------- --------
Income before the
cumulative effect of
accounting change 686 657 811 415 2,569
Cumulative effect of
accounting change - - - (36) (36)
------- ------- ------- ------ --------
Net income $ 686 $ 657 $ 811 $ 379 $ 2,533
======= ======= ======= ====== ========
Diluted EPS before the
cumulative effect of
accounting change (1) $ 0.33 $ 0.31 $ 0.39 $ 0.20 $ 1.24
======= ======= ======= ====== ========
Diluted EPS $ 0.33 $ 0.31 $ 0.39 $ 0.19 $ 1.22
======= ======= ======= ====== ========

(1) EPS for the year does not equal the sum of the quarters due to
rounding.

Table 2 presents quarterly and full year stock option expense for
fiscal 2005:

Table 2 - Stock Option
Expense Impact Year
---------------------- Ended
Oct. 1,
Q1 Q2 Q3 Q4 2005
------- ------- ------- ------- -------
Segment operating income:
Media Networks
Cable Networks $ (8) $ (9) $ (9) $ (10) $ (36)
Broadcasting (15) (16) (16) (17) (64)
------ ------ ------ ------ ------
Total Media Networks (23) (25) (25) (27) (100)

Parks and Resorts (9) (10) (11) (12) (42)
Studio Entertainment (10) (12) (10) (9) (41)
Consumer Products (5) (5) (5) (5) (20)
------- ------- ------- ------- -------
(47) (52) (51) (53) (203)

Corporate and unallocated
shared expenses (11) (13) (13) (13) (50)
Other - - - - -
------- ------- ------- ------- -------
Income before income
taxes and the cumulative
effect of accounting
change (58) (65) (64) (66) (253)
Income taxes 21 24 24 24 93
-------- -------- -------- -------- -------
Income before the
cumulative effect of
accounting change (37) (41) (40) (42) (160)
Cumulative effect of
accounting change - - - - -
------- ------- ------- ------- -------
Net income $ (37) $ (41) $ (40) $ (42) $ (160)
======= ======= ======= ======= =======
Diluted EPS before the
cumulative effect of
accounting change $ (0.02) $ (0.02) $ (0.02) $ (0.02) $ (0.08)
======= ======= ======= ======= =======
Diluted EPS $ (0.02) $ (0.02) $ (0.02) $ (0.02) $ (0.08)
======= ======= ======= ======= =======


Table C
(continued)
The Walt Disney Company
RECONCILIATION OF "FISCAL 2005 AS REPORTED" TO "FISCAL 2005 AS
ADJUSTED TO EXCLUDE THE EFFECT OF THE NEW STOCK OPTION EXPENSE RULE"
(continued)
(unaudited, in millions, except per share data)

Table 3 presents quarterly and full year operating results for
fiscal 2005 adjusted to exclude the effect of the new stock option
expense rule:

Table 3 - Fiscal Year
2005 As Adjusted (1)
To Exclude The Effect Of
The New Stock Option
Expense Rule Year
------------------------- Ended
Oct. 1,
Q1 Q2 Q3 Q4 2005
------- ------- ------- ------ --------
Segment operating income:
Media Networks
Cable Networks $ 327 $ 671 $ 729 $ 594 $ 2,321
Broadcasting 140 54 269 65 528
------ ------ ------ ----- -------
Total Media Networks 467 725 998 659 2,849

Parks and Resorts 258 193 448 321 1,220
Studio Entertainment 333 253 (34) (304) 248
Consumer Products 231 111 61 137 540
------- ------- ------- ------ --------
1,289 1,282 1,473 813 4,857

Corporate and unallocated
shared expenses (113) (105) (124) (144) (486)
Other (60) (41) (35) (172) (308)
------- ------- ------- ------ --------
Income before income
taxes and the cumulative
effect of accounting
change 1,116 1,136 1,314 497 4,063
Income taxes (393) (438) (463) (40) (1,334)
-------- -------- -------- ------- --------
Income before the
cumulative effect of
accounting change 723 698 851 457 2,729
Cumulative effect of
accounting change - - - (36) (36)
------- ------- ------- ------ --------
Net income $ 723 $ 698 $ 851 $ 421 $ 2,693
======= ======= ======= ====== ========

Diluted EPS before the
cumulative effect of
accounting change (2) $ 0.35 $ 0.33 $ 0.41 $ 0.23 $ 1.32
======= ======= ======= ====== ========
Diluted EPS $ 0.35 $ 0.33 $ 0.41 $ 0.21 $ 1.30
======= ======= ======= ====== ========

(1) Operating results for fiscal 2005 adjusted to exclude the effect
of the new stock option expense rule is not a financial measure
defined by GAAP. See the discussion of non-GAAP financial
measures.
(2) Diluted EPS before the cumulative effect of accounting change for
the fourth quarter of fiscal 2005 does not equal the sum of
diluted EPS from Table 1 and Table 2 due to rounding.


Table D
The Walt Disney Company
MEDIA NETWORKS
(unaudited, in millions)

Fiscal Year 2005 2004
---------------------------------------------------- ------- -------

Revenues:
Cable Networks $ 7,262 $ 6,410
Broadcasting 5,945 5,368
------- -------
$13,207 $11,778
======= =======

Segment operating income:
Cable Networks $ 2,285 $ 1,924
Broadcasting 464 245
------- -------
$ 2,749 $ 2,169
======= =======

Depreciation expense:
Cable Networks $ 80 $ 70
Broadcasting 102 102
------- -------
$ 182 $ 172
======= =======


Fourth Quarter of Fiscal Year 2005 2004
---------------------------------------------------- ------- -------

Revenues:
Cable Networks $ 1,900 $ 1,715
Broadcasting 1,452 1,172
------- -------
$ 3,352 $ 2,887
======= =======

Segment operating income (loss):
Cable Networks $ 584 $ 523
Broadcasting 48 (75)
------- -------
$ 632 $ 448
======= =======

Depreciation expense:
Cable Networks $ 22 $ 21
Broadcasting 27 27
------- -------
$ 49 $ 48
======= =======


Table E
The Walt Disney Company
POTENTIAL DILUTION FROM EMPLOYEE OPTIONS
(unaudited)

Fully diluted shares outstanding and diluted earnings per share
include the effect of in-the-money stock options calculated based on
the average share price for the period and assumes conversion of the
Company's convertible senior notes. The dilution from employee options
increases as the Company's share price increases, as shown below:

Average Total Incremental Percentage of Hypothetical
Disney In-the-Money Diluted Average Shares Q4 2005
Share Price Options Shares (1) Outstanding EPS Impact (3)
----------- ------------ ------------ --------------- ----------------

$25.15 119 million -- (2) -- $0.000
----------------------------------------------------------------------
30.00 161 million 10 million 0.49 % (0.001)
40.00 219 million 37 million 1.80 % (0.004)
50.00 226 million 57 million 2.70 % (0.005)

(1) Represents the incremental impact on fully diluted shares
outstanding assuming the average share prices indicated, using the
treasury stock method. Under the treasury stock method, the
assumed proceeds that would be received from the exercise of all
in-the-money options are assumed to be used to repurchase shares.
(2) Fully diluted shares outstanding for the quarter ended October 1,
2005 total 2,053 million and include the dilutive impact of
in-the-money options at the average share price for the period of
$25.15 and assume conversion of the convertible senior notes. At
the average share price of $25.15, the dilutive impact of
in-the-money options was 13 million shares for the quarter.
(3) Based upon Q4 2005 income before cumulative effect of accounting
change of $415 million or $0.20 diluted earnings per share before
cumulative effect of accounting change.


Table F
The Walt Disney Company
CONDENSED CONSOLIDATING INCOME STATEMENT WORKSHEET
(unaudited, in millions)

The following supplemental worksheet presents the condensed
consolidating income statement of the Company for the year and quarter
ended October 1, 2005, reflecting the impact of consolidating the
income statements of Euro Disney and Hong Kong Disneyland.

Euro Disney,
Before Euro Hong Kong
Disney and Hong Disneyland
Kong Disneyland and
Year Ended October 1, 2005 Consolidation(1) Adjustments Total
-------------------------- ----------------- ------------ ---------
Revenues $ 30,557 $ 1,387 $ 31,944
Cost and expenses (26,349) (1,488) (27,837)
Gain on sale of businesses
and restructuring and
impairment charges (6) -- (6)
Net interest expense (587) (10) (597)
Equity in the income of
investees 441 42 483
----------------- ------------ ---------
Income before income
taxes, minority interests
and the cumulative effect
of accounting change 4,056 (69) 3,987
Income taxes (1,249) 8 (1,241)
Minority interests (238) 61 (177)
----------------- ------------ ---------
Income before the
cumulative effect of
accounting change 2,569 -- 2,569
Cumulative effect of
accounting change (36) -- (36)
----------------- ------------ ---------
Net income $ 2,533 $ -- $ 2,533
================= ============ =========

Euro Disney,
Before Euro Hong Kong
Disney and Hong Disneyland
Quarter Ended October 1, Kong Disneyland and
2005 Consolidation(1) Adjustments Total
--------------------------- --------
Revenues $ 7,330 $ 404 $ 7,734
Cost and expenses (6,713) (421) (7,134)
Gain on sale of businesses
and restructuring and
impairment charges (6) -- (6)
Net interest expense (210) (23) (233)
Equity in the income of
investees 103 17 120
----------------- ------------ --------
Income before income taxes,
minority interests and the
cumulative effect of
accounting change 504 (23) 481
Income taxes (24) 8 (16)
Minority interests (65) 15 (50)
----------------- ------------ --------
Income before the
cumulative effect of
accounting change 415 -- 415
Cumulative effect of
accounting change (36) -- (36)
----------------- ------------ --------
Net income $ 379 $ -- $ 379
================= ============ ========

(1) These amounts include Euro Disney and Hong Kong Disneyland under
the equity method of accounting. As such, any royalty and
management fee income from these operations is included in
Revenues and our share of their net income is included in Equity
in the Income of Investees.


Table G
The Walt Disney Company
CONDENSED CONSOLIDATING BALANCE SHEET WORKSHEET
(unaudited, in millions)

This supplemental worksheet presents the condensed consolidating
balance sheet of the Company, reflecting the impact of consolidating
the balance sheets of Euro Disney and Hong Kong Disneyland as of
October 1, 2005.

Before Euro Euro Disney,
Disney and Hong Kong
Hong Kong Disneyland
Disneyland and
Consolidation Adjustments Total
------------- ------------ -------
Cash and cash equivalents $ 1,188 $ 535 $ 1,723
Other current assets 6,820 302 7,122
------------- ------------ -------
Total current assets 8,008 837 8,845
Investments 2,080 (854) 1,226
Fixed assets 12,533 4,435 16,968
Intangible assets 2,731 -- 2,731
Goodwill 16,974 -- 16,974
Other assets 6,407 7 6,414
------------- ------------ -------
Total assets $ 48,733 $ 4,425 $53,158
============= ============ =======

Current portion of borrowings $ 2,309 $ 1 $ 2,310
Other current liabilities 6,184 674 6,858
------------- ------------ -------
Total current liabilities 8,493 675 9,168
Borrowings 7,205 2,952 10,157
Deferred income taxes 2,438 (8) 2,430
Other long term liabilities 3,832 113 3,945
Minority interests 555 693 1,248
Shareholders' equity 26,210 -- 26,210
------------- ------------ -------
Total liabilities and shareholders'
equity $ 48,733 $ 4,425 $53,158
============= ============ =======


Table H
The Walt Disney Company
CONDENSED CONSOLIDATING CASH FLOW STATEMENT WORKSHEET
(unaudited, in millions)

The following supplemental worksheet presents the condensed
consolidating cash flow statement of the Company for the year ended
October 1, 2005, reflecting the impact of consolidating the cash flow
statements of Euro Disney and Hong Kong Disneyland.

Before Euro Euro Disney,
Disney and Hong Kong
Hong Kong Disneyland
Disneyland and
Consolidation Adjustments Total
-------------- ------------ --------
Cash provided by operations $ 4,152 $ 117 $ 4,269
Investments in parks, resorts
and other property (1,112) (711) (1,823)
-------------- ------------ --------
Free cash flow 3,040 (594) 2,446
Other investing activities (38) 170 132
Cash (used) provided by
financing activities (3,544) 647 (2,897)
-------------- ------------ --------
(Decrease) increase in cash
and cash equivalents (542) 223 (319)
Cash and cash equivalents,
beginning of period 1,730 312 2,042
-------------- ------------ --------
Cash and cash equivalents, end
of period $ 1,188 $ 535 $ 1,723
============== ============ ========