Walt Disney Company (DIS)

Segment Operating Income

Segment operating income decreased 4%, or $50 million, to $1.3 billion for the quarter due to a decrease of 38%, or $100 million, at Broadcasting, and an increase of 5%, or $50 million, at the Cable Networks. The decrease at Broadcasting was primarily due to lower advertising sales at the owned television stations and higher programming costs at the ABC Television Network, partially offset by increased sales of ABC Studios Productions. The increase at the Cable Networks was due to growth at ESPN, ABC Family and the domestic Disney Channel.

Segment Operating Income

Segment operating income decreased 50%, or $168 million, to $171 million reflecting decreases at the domestic operations and Disneyland Resort Paris.

26

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – (continued)

Segment Operating Income

Segment operating income decreased 97%, or $364 million, to $13 million primarily due to decreases in domestic home entertainment and worldwide theatrical distribution.

Segment Operating Income

Segment operating income decreased 14%, or $324 million, to $2.0 billion due to decreases of $305 million at Broadcasting and $19 million at the Cable Networks. The decrease at Broadcasting was primarily due to lower advertising revenue at the ABC Television Network and the owned television stations and a bad debt charge in connection with the bankruptcy of a syndication customer, partially offset by higher international sales of ABC Studios productions. The decrease at the Cable Networks was primarily due to decreases at the domestic Disney Channel and at ESPN, partially offset by an increase at ABC Family.

Segment Operating Income

Segment operating income decreased 34%, or $291 million, to $553 million, primarily due to decreases at the Walt Disney World Resort, Disneyland Resort Paris, Disney Vacation Club and Disneyland Resort.

Segment Operating Income

Segment operating income decreased 78%, or $691 million, to $200 million primarily due to decreases in worldwide home entertainment and domestic theatrical distribution.

Segment Operating Income

Segment operating income decreased 29%, or $274 million, to $655 million for the quarter due to a decrease of 12%, or $69 million, at the Cable Networks and a decrease of 60%, or $205 million, at Broadcasting. The decrease at the Cable Networks was primarily due to decreases at the domestic Disney Channels and at ESPN. The decrease at Broadcasting was primarily due to lower primetime advertising revenue at the ABC Television Network and at the owned television stations, and a bad debt charge in connection with the bankruptcy of a syndication customer, partially offset by lower programming and development costs.

Segment Operating Income

Segment operating income decreased 24%, or $123 million, to $382 million due to decreases at the domestic operations and Disneyland Resort Paris.

Segment Operating Income

Segment operating income decreased 64%, or $327 million, to $187 million primarily due to a decrease at worldwide home entertainment.

Segment Operating Income

FACE="Times New Roman" SIZE="2">Segment operating income increased 4%, or $24 million, to $631 million, driven by higher earned royalties at Merchandise Licensing, partially offset by the increased investment in video game development at Disney
Interactive Studios.

Segment Operating Income

Segment operating income decreased 15%, or $89 million, to $514 million primarily due to a decrease in domestic home entertainment partially offset by increases in worldwide theatrical distribution and music distribution.

On November 5, 2007, members of the Writers Guild of America commenced a work stoppage. See Risk Factors on page 36 for further information regarding the impact of the work stoppage.

Segment Operating Income

Segment operating income increased $516 million to $1.0 billion primarily due to increases in worldwide home entertainment and worldwide theatrical distribution.

Segment Operating Income

Segment operating income increased $564 million, to $839 million, due to an improvement at worldwide home entertainment.

Segment Operating Income

Segment operating income increased $476 million, to $604 million, primarily due to an improvement in worldwide home entertainment, partially offset by lower results in worldwide theatrical motion picture distribution.

-48-