Walt Disney Company (DIS)

Certain Relationships and Related Transactions—What related party transactions involved Directors?

Director John Bryson’s wife, Louise Bryson, serves as Executive Vice President—Distribution and Business Development for Lifetime Entertainment Television, a cable television programming service in which the Company has an indirect 50% equity interest. Ms. Bryson received an aggregate salary (including car allowance and payments of deferred compensation) of $480,191 for her services with Lifetime during fiscal 2004 and received a bonus of $483,195 in fiscal 2004 with respect to her services in fiscal 2003. She is also eligible for an annual bonus for fiscal 2004, although as of December 31, 2004, no bonus determination for 2004 had yet been made by Lifetime with respect to Ms. Bryson. By agreement among the Company, Lifetime and Lifetime’s other equity owner, The Hearst Corporation, neither the Company nor any of its employees or affiliates participates in any decision making at Lifetime with respect to Ms. Bryson’s performance or compensation. In addition, as noted above, Lifetime acquired programming and purchased advertising time from, and sold advertising time to, Company subsidiaries, but the Company believes that neither Mr. Bryson nor Ms. Bryson had a material direct or indirect interest in those transactions.

The Company paid $39,200 to Air Shamrock, Inc. as reimbursement for use of an Air Shamrock aircraft for business travel in fiscal 2004 by Roy Disney, who was Vice Chairman of the Company and a Director until November 30, 2003. This payment was in addition to previously disclosed amounts paid in fiscal 2004 for travel in fiscal 2003. Payment was based on an independent evaluation obtained by the Company of the average incremental cost of operating the type of aircraft typically used by the Company including an allowance for incidental expenses, which together formed the basis for an agreed maximum reimbursement rate. Air Shamrock is owned by Shamrock Holdings, Inc., of which Mr. Disney is a director and which is wholly owned by Mr. Disney and his children and trusts for their and his grandchildren’s benefit. Stanley Gold, a former Director, is also a director of Air Shamrock, Inc. and President and Chief Executive Officer of Shamrock Holdings, Inc.

Company President and Director Robert Iger’s father-in-law, Eugene Bay, is a principal of Eugene Bay Associates, Inc., a marketing company that has been retained by the Company’s subsidiary ESPN, Inc. since

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1990 (prior to Mr. Iger’s marriage to Mr. Bay’s daughter) to provide sports marketing services. Mr. Bay’s company received a total of $151,275 for services provided during fiscal 2004.

The Company’s subsidiary ABC, Inc. makes an office and secretarial services available to Thomas Murphy, who served as a Director of the Company until March 2004 and was Chairman of the Board of Capital Cities/ABC, Inc. prior to its acquisition by the Company in 1996. ABC, Inc. also provides Mr. Murphy with a leased car and a driver. The aggregate cost to the Company of the secretarial and transportation services in fiscal 2004 was approximately $253,057; Mr. Murphy’s office did not represent an incremental expense to the Company, but reflected an internal cost allocation of approximately $87,387. Ray Watson also served as a Director of the Company until March 2004 and his son, David Watson, worked as executive director for new media for a Company subsidiary during the year, receiving an aggregate salary and bonus of $153,596.

Pursuant to the provisions of the Company’s bylaws and indemnification agreements, fees and other expenses incurred in connection with derivative litigation against current and former Directors relating to the employment agreement with the Company’s former president, Michael S. Ovitz, as described in the Company’s 2004 Annual Report on Form 10-K, are being advanced on behalf of those Directors by the Company or the Company’s insurer. Accordingly, from the beginning of fiscal 2004 through December 31, 2004, the Company advanced (or provided services at the Company’s cost in an amount equal to) $4,198,489 for such fees and expenses, including legal fees, relating to the foregoing matters on behalf of such current and former Directors including Messrs. Gold, Disney, Eisner, Mitchell, Murphy, Watson and Wilson and Fr. O’Donovan. Of this amount, $3,952,481 was paid to a law firm representing current and former Directors including Messrs. Mitchell, Murphy, Watson and Wilson and Fr. O’Donovan; $10,373 was paid to a law firm representing Messrs. Disney and Gold; $9,657 was paid to a law firm representing Mr. Eisner; and the remainder was advanced for other related expenses. All amounts advanced by the Company and not yet reimbursed by the Company’s insurer are subject to a reservation of rights to such reimbursement. Additional amounts (not included above) were paid directly by the Company’s insurer. Some bills with respect to the foregoing matters submitted to the Company are either reviewed and processed for payment or sent to the Company’s insurer for payment, and other bills have been submitted directly to the Company’s insurer.