The Walt Disney Company Press Release

Disney Board of Directors Elects Pepper and Smith, Increases Annual Dividend to 27 Cents Per Share; January Dividend Payment to Represent 50th Consecutive Year of Dividend Payments to Shareholders

BURBANK, Calif.--Dec. 2, 2005--The Walt Disney Company (NYSE:DIS) Board of Directors has elected John E. Pepper, Jr., former chairman and CEO of Procter & Gamble and Orin C. Smith, former president and CEO of Starbucks Corp. as two new independent directors, effective January 1, 2006. With the election of Pepper and Smith, 11 of 13 directors on Disney's Board will be independent.


"By growing, cultivating and protecting some of the best known brands worldwide at Procter & Gamble and Starbucks, John and Orin bring invaluable global perspectives as well as proven commitments to social responsibility," said Senator George J. Mitchell, Disney chairman. "Disney shareholders will benefit from their decades of world-class leadership, finance and high profile consumer brand experience."

The Disney Board also declared an annual cash dividend of $0.27 per share, a 12.5% increase from last year's dividend, payable on January 6, 2006 to shareholders of record at the close of business December 12, 2005.

"With our strong balance sheet and third straight year of double-digit earnings growth, Disney is in a good position to continue returning capital to shareholders even as we invest for future growth," said Robert A. Iger, president and CEO of The Walt Disney Company. "In addition to this increased dividend, since August 2004, we have invested over $3.9 billion to purchase approximately 154 million shares of Disney stock, which further demonstrates our confidence in growing shareholder value over time."

The Board also unanimously requested that Senator Mitchell remain a director, and continue as chairman, through December 2006 to facilitate an orderly chairman succession process. Senator Mitchell had planned to retire following Disney's 2006 Annual Meeting, but agreed to the Board's request that he stand for re-election at the 2006 Annual Meeting. With two new directors joining in January, the full Board of 13 members will now have an appropriate amount of time to work closely together and carefully deliberate in the selection of Disney's next chairman.

John E. Pepper, Jr.

John Pepper, 67, was named chairman and chief executive officer of Procter & Gamble in 1995 and retired from the company in 2002, after 38 years of service. In 2003, he retired as chairman of the Executive Committee of the Procter & Gamble Board. As CEO of Procter & Gamble he helped lead the company's business in developing markets, particularly Eastern and Central Europe and China. For the past two years he has been vice president for Finance and Administration at Yale University.
Pepper began his career with Procter & Gamble in 1963, was named general manager of Procter & Gamble Italia in 1974 and promoted to group vice president in 1980. In 1984, Pepper was elected to the company's board of directors and in 1986 was named president. He served as Successor Trustee of the Yale Corporation from 1995 to 2003, which included election by his peers to the post of senior fellow for his last 2 years.

Pepper is a director of Boston Scientific Corp and of PSI (Population Services International). He also is on the executive committee of the Cincinnati Youth Collaborative and is honorary co-chair and member of the National Underground Railroad Freedom Center.

Orin C. Smith

Orin Smith, 63, was named president and chief executive officer of Starbucks Corp. in 2000 and retired earlier this year. Smith joined Starbucks in 1990 as chief financial officer and was named president and chief operating officer in 1994. In his five years as CEO, Starbucks grew from nearly 2,500 stores and $1.7 billion in sales at the beginning of 2000 to more than 8,500 stores and over $5 billion in sales for fiscal 2004.
Prior to joining Starbucks, Smith spent 14 years with Deloitte & Touche, later becoming partner-in-charge of the Northwest consulting practice. In addition, he served as director of the Office of Financial Management under Washington State Governors Ray from 1977 to 1980 and Gardner from 1985 to 1987.

Smith is a director of Nike, Inc. and Washington Mutual. He also serves on several nonprofit boards in the Seattle area, including the Advisory Board for the University of Washington School of Business and the University of Washington Medicine Board of Directors.

Smith also serves on the board of directors of Conservation International, a global nonprofit organization. Disney supported Conservation International with a grant of $400,000 to help fund Expedition Everest: Mission Himalayas, a search for new species and the exploration of ancient legends in the Himalayas. In appointing Smith to the Disney Board, the Board determined that this grant and another $33,000 grant to Conservation International during the last year did not impair Smith's independence from management of the Company under the Company's Corporate Governance Guidelines.

Disney's Governance and Nominating Committee worked with Russell Reynolds Associates, a global executive recruiting firm, to identify Pepper and Smith as candidates for the Board.