Statement By John E. Pepper, Jr., Chairman Of The Board, The Walt Disney Company Regarding Board Investigation Of Stock Option Practices At Pixar Prior To The Acquisition

The Audit Committee and the Board of The Walt Disney Company have completed their investigation into stock option practices at Pixar prior to the date of its acquisition by Disney. The Committee and Board have concluded that while options were backdated at Pixar prior to the acquisition, no one currently associated with the Company engaged in any intentional or deliberate acts of misconduct. The Board further determined that Disney should address the additional income tax liability issues facing Pixar employees who hold such options, including participating in programs established by the IRS and the State of California to facilitate the payment of such taxes on behalf of employees. The Company expects that the impact associated with remedying these tax issues will not be material to the Disney financial statements.”