Lowell Singer - Senior Vice President, Investor Relations Robert A. Iger - President, Chief Executive Officer, Director Thomas O. Staggs - Chief Financial Officer, Senior Executive Vice President

Jason Bazinet - Citigroup Anthony DiClemente - Lehman Brothers Doug Mitchelson - Deutsche Bank Mark Wienkes - Goldman Sachs Benjamin Swinburne - Morgan Stanley Michael Morris - UBS Michael Nathanson - Sanford C. Bernstein Jessica Reif-Cohen - Merrill Lynch Imran Khan - J.P. Morgan Jason Helfstein - Oppenheimer Tuna Amobi - Standard & Poor’s David Miller - Caris & Company Rich Greenfield - Pali Capital David Joyce - Miller Tabak & Company

Good day, ladies and gentlemen, and welcome to the third quarter 2008 Walt Disney earnings conference call. (Operator Instructions) I would now like to turn the presentation over to your host for today’s call, Mr. Lowell Singer, Senior Vice President of Investor Relations for the Walt Disney Company. Please proceed.

Thank you and good afternoon, everyone. Welcome to Walt Disney's third quarter 2008 conference call. Our press release was issued a few minutes ago and is now available on our website at www.disney.com/investors. Today’s call will also be webcast and that webcast will be available on our website. And after the call, a replay and a transcript of today’s remarks will also be available on our website. Joining me in Burbank for today’s call are Bob Iger, Disney’s President and Chief Executive Officer, and Tom Staggs, Senior Executive Vice President and Chief Financial Officer. Bob and Tom will lead off with some brief comments and then, on the off chance that you have any questions, we will be happy to take them. I will then read the Safe Harbor provisions. So with that, let me turn the call over to Bob and we will get started. Robert A. Iger: Thank you, Lowell. We’ve had another solid quarter fuelled by great creative momentum and the trust consumer have that our brands will deliver a consistently high quality entertainment experience. These attributes are incredibly important and incredibly valuable in an uncertain global economic environment and we believe they position us well to manage through undeniably turbulent times. Like all companies, we aren’t immune to the challenging economy but we continue to be pleased with the level of business activity we’ve seen so far and especially with our long-term market position. We have an agile, experienced management team, a clear strategic vision for maximizing returns across our various businesses, and an unbeatable portfolio of creative assets. In the eyes of the global consumers, our brands have never been stronger or more relevant. We have, in other words, a pretty good hand in a very tough game. That said, we remain watchful and are committed to take the steps necessary to keep our businesses and our market position strong and to do so decisively. Our continued success depends on superb creativity and since we last talked, there have been several highlights that underline the breadth of the creative engines now at work at Disney. WALL•E is a big hit, generating nearly $200 million at the domestic box office so far and in a testament to its quality, has been the best reviewed movie of the year, animated or otherwise. We believe WALL•E will continue to provide substantial value over time as one of our classic films. Disney Channel’s Camp Rock has generated huge excitement among kids, [sparring] near record breaking cable ratings and online traffic. ESPN’s coverage of the NBA Finals was a huge success, attracting great viewer numbers across multiple platforms with a classic match-up. And Toy Story Mania, which opened in June, has received great reviews as a cutting edge attraction that brings the incredible skills of our Imagineers to bear on a great Pixar story. Tom will go into more detail in a moment but our park performance during the quarter was particularly noteworthy considering the environment. The content produced by Disney, ESPN, and ABC, irrespective of whether it is at our parks, on television, on the movie screen or on the Internet stands tall in a field of ever-increasing choice and the examples I just cited share several attributes. They are high in quality, relevant, identified with our brands, and priced in time attractively across platforms and markets. In the coming months, we have more great entertainment on the way. We expect our fall release, High School Musical 3: Senior Year, to sustain what’s become a fantastic global franchise for this company, while Bolt is a terrifically funny new Disney Animated film. Both Miley Cyrus and the Jonas Brothers have new records and other great new projects in the works, and we’ll soon launch an enhanced version of Disney.com, making even more compelling a rich, event-filled family entertainment site that drew a record 30 million unique visitors in June. Our continued success validates our strategy of creating dependable, Disney-branded franchises that can be leveraged across all of our lines of businesses and adapted to maximize their relevance to local markets around the world. By taking this approach, we build a broader and more stable base of earnings while increasing the financial returns from our creative successes. That’s the bottom line of the Disney difference -- more than any other media company, we are able to successfully and consistently create multiple experiences and products out of our creative properties in ways that generate consumer enthusiasm and real shareholder value. And with that, I will turn things over to Tom. Thomas O. Staggs: Thank you, Bob and good afternoon, everyone. As Bob indicated, we are pleased with how well our businesses continued to perform this quarter. At our media segment, our cable networks delivered double-digit increases in revenue and operating income, ESPN led the way once again with higher subscriber fees and low double-digit percentage gains in advertising revenue. Ratings on the ESPN network also were up double-digit percentages versus our prior Q3, boosted by the NBA play-offs and the first two rounds of the Masters and U.S. Open golf tournaments. ESPN deferred approximately $65 million more in affiliate revenue in the first half of fiscal 2008 compared to last year. In Q3, we recognized about $30 million of this incremental deferred revenue and we expect to recognize the remainder in Q4. Disney Channel benefited from subscriber growth in key international markets and the network’s successful programming is helping to fuel demand for the Disney brand around the world. Broadcasting revenue was flat for the quarter while operating income decreased, primarily driven by lower results at our local television stations and higher amortization costs on shows in syndication. At our television stations, advertising revenue decreased by mid-single-digit percentages compared to Q3 of 2007, principally due to softness in the automotive category. At the same time, we’re extremely pleased with our station management team’s performance. Eight of our 10 stations are number on in their markets and they have gained market share in the face of a tough environment. At the ABC Network, lower primetime ratings were more than offset by strong ad pricing and lower programming costs. The lower programming costs in the quarter were in large measure the result of timing shifts for pilot and other development costs due to the WGA strike. This timing benefit will reverse in fiscal Q4. While ad revenues reflected softer ratings, scatter CPMs in Q3 remained above up-front pricing by strong double-digit percentages, driven again by tight supply in the market. Thus far in Q4, scatter pricing is again well ahead of the up-front. The pace of advertising sales has slowed somewhat in recent weeks at the TV stations and, to a lesser extent, at ESPN and the ABC Television Network, driven primarily by softness in the domestic auto, financial services, and consumer electronic categories. As Bob mentioned, parks and resorts had a solid quarter, especially in light of the tough environment, as compared to last year’s record Q3 performance. These results reflected slightly lower attendance at our domestic parks, which were affected by the timing of the Easter holiday falling in the third quarter of fiscal 2007 and in the second quarter this year. The impact of lower attendance was more than offset by higher corporate alliance income and increased guest spending at Walt Disney World. We estimate that without the impact of the Easter timing shift, combined attendance at our domestic parks in Q3 would have been ahead of prior year by lower single-digit percentages. As you might guess, international visitation was our strongest guest segment compared to the prior year quarter. Per capita spending at Walt Disney World was up 3% versus Q3 2007, driven by higher average admission prices, while spending at Disneyland was 2% lower than last year. At our Florida resorts, hotel occupancy remained strong, coming in at 92%, only about one percentage point below last year, and per room spending was on par with last year. At Disneyland, occupancies were 91%. Although that figure is just about five percentage points lower than last year, per room spending in California was up by 5%, driven by gains in average room rates. Looking ahead, current room reservations at our domestic resorts are virtually on par with prior year for the September quarter, and modestly ahead of last year for the December quarter. Studio entertainment revenue and operating income were lower in the third quarter due to the performance of Prince Caspian compared to Pirates 3 last year, but as Bob mentioned, we’re pleased with the performance of WALL•E, which continues its strong rollout around the world. At consumer products, earned licensing royalties grew by double-digits compared to the prior Q3, driven by continued strength across our many licensing categories as we leverage our broad base of licensed franchises. The strong growth in licensing was offset by a decline in our home video game business, as games based on Prince Caspian did not measure up to the strength of those based on Pirates 3 last year. As we’ve discussed in the past, we believe we have significant growth potential in videogames and have continued to ramp up our development spending. This increased spending also impacted the quarter’s results. Revenue growth in margins at consumer products reflected our acquisition of the Disney Stores North America in Q3. In total, our Disney Stores business accounted for nearly $90 million in increased revenues, but did not meaningfully impact segment operating income. We expect that our re-acquisition of the stores will modestly reduce profits at consumer products for the balance of this year. We have now reduced our number of stores in North America to our target footprint of about 225 locations. The strength of our business enables us to maintain a strong balance sheet, even while we invest in growth opportunities we believe can generate strong returns. At the same time, we continue to return significant capital to our shareholders through dividends and share repurchase. So far this fiscal year, we have purchased 114 million shares for roughly $3.6 billion. We remain confident in the strength of our balance sheet, our cash flow, and the long-term outlook for our company and as a result, we expect to continue to repurchase shares going forward. Our results demonstrate this company’s ability to manage creative assets with financial discipline even in uncertain times. More importantly, the power of our brand, our diversified franchise portfolio, our creative strength and integrated approach we take to managing our businesses position us well to grow our earnings over time and deliver long-term shareholder value. With that, I will turn the call over to Lowell for Q&A.

Okay, Operator, we are ready to take the first question.

(Operator Instructions) Your first question will come from the line of Jason Bazinet from Citigroup. Please proceed. Jason Bazinet - Citigroup: I just had one quick question on CapEx at the parks. I think you said in the past it should run about $1 billion a year. It seems like it’s running a little bit below that and I was just wondering -- do you expect that to ramp up in the remaining quarter of the fiscal or do you think you are going to come in below sort of the long run average? Thanks. Thomas O. Staggs: We had said traditionally or historically, we had said that we had targeted capital expenditures for the domestic parks below $1 billion. Not that long ago after we talked about ramping up our investment in California Adventure, investing in cruise ships, et cetera, Jay [Rizulo] had made some comments where he said that this year, we would indeed be below $1 billion in capital expenditures but that over time as we got into those investments, we would see years that would be somewhat above that bogey. But of course, as we mentioned in the past, we’re actually very excited about those investments and think they are going to drive strong returns, so we’re happy to put the money in that direction. Jason Bazinet - Citigroup: But you think it will happen in fiscal ’09? Thomas O. Staggs: We haven’t made any predictions for capital spending in ’09. Jason Bazinet - Citigroup: Okay. Thank you.

Okay, thanks, Jason. Operator, next question, please.

Your next question will come from the line of Anthony DiClemente from Lehman Brothers. Anthony DiClemente - Lehman Brothers: Thanks for taking the question. A question for Bob; Bob, your operating environment where you are seeing fragmentation of media content and increasing difficult monetizing some of that content in a digital world, in many cases that creates inherent conflict of interest between content and distribution, so my question is are your interests aligned with those of Steve Jobs who is the single largest shareholder? And can you just help us with a couple of examples of how you and Steve are internally negotiating the balance between the interest of content and the interest of distribution? Thanks. Robert A. Iger: The decisions the Walt Disney Company makes in terms of how to distribute its content, how to price its content, and when to distribute its content are made solely by the management of the Walt Disney Company and are not determined or even influenced by any other outside entities, including Steve. The decisions that we’ve made in terms of where, when, how we have distributed content digitally have been made by us and in some cases made at a time that pre-dated the purchase of Pixar and the presence of Steve as a board member and as a shareholder. I happen to believe and my senior management team agrees with me that in a world where more and more people are migrating online or to their computer to access both information and entertainment, that the Walt Disney Company would be served well by having a very strong presence in that environment. And in fact, our results to date have proved that having that presence has actually created benefits, both in terms of brand value, relevance, relatability, as well as the bottom line. Witness the fact that since we decided to put movies on the iTunes platform, we’ve sold around 5 million movies, which we believe is largely incremental to what I’ll call the after market movie business; that is, after its theatrical release. I happen to believe that unless we occupy space in those platforms, the company will be, and other companies in the traditional media space, will be marginalized. So I think that what we have been doing from a strategic perspective and from a bottom line perspective is absolutely the right thing and I also believe that our ability to monetize will become more and more evident, because what you are seeing is you are seeing expansion of the marketplace, meaning you are seeing an increase in consumption. And actually, we’ve managed to maintain margins that we feel quite comfortable with but I think focusing on margins is not necessarily the only thing that you should focus on. The fact of the matter is consumption is increasing. We’ve seen that at ABC where access to programs has never been greater and therefore consumption of programs is greater. I don’t think we’d be getting as much consumption of the ABC television programs if the only place you could see them was on the ABC Television Network. So while I admit that monetization against basically specific consumption is still somewhat an open question in terms of just how much, how far, how deep we’ll be able to go, I actually think that we’ve been driving incremental revenue. And again, I want to emphasize the fact that we have no conflict of interest evident in this company at all and the decisions that we’ve been making, we’ve been making solely for the benefit of the shareholders of the Walt Disney Company and the long-term value that we are aiming to create. Anthony DiClemente - Lehman Brothers: Thank you. I appreciate the answer. Thanks for taking my question.

Thanks, Anthony. Operator, next question, please.

Your next question will come from the line of Doug Mitchelson from Deutsche Bank. Doug Mitchelson - Deutsche Bank: Thanks very much. So my question is on theme parks. I think hotel bookings flat for September quarter and then up for the December quarter is pretty remarkable with the economic backdrop, with gas prices rising, with what’s happening with airlines. Can you just walk us through why you think your pacings are still holding up so well in this environment, and how long that can be sustained? Thanks. Robert A. Iger: Well, it starts with the fact that we have a product that is very, very attractive, clearly, and we’ve felt for a long time that the family vacation is still something that’s considered quite valuable or significant, not just to domestic families but to international families. And I think we have a competitive advantage as well in that the experience that you can expect to have when you visit a Disney park is unlike any that you’d experience elsewhere, and in some cases unlike anything you’d experience in the entire vacation space. So I think it starts with that. I happen to believe that our brand has strengthened over time and that’s due to increased quality and just increased creative success. The presence of Hannah Montana, High School Musical, the growing of presence of Pixar, for instance, in our parks, the heightened relevance of Pirates of the Caribbean since the three movies were released, another example of that. And I think brand perception goes a long way in terms of the appeal and the sustainability of the Disney park and resort experience, and I also believe that we’ve taken steps over time, and it’s a fairly significant amount of time, to make the product more accessible and more affordable. Seventy-four percent of our rooms in Orlando are either value priced or moderately priced, and that makes that experience much more accessible to more people, even in these more challenging times. And we also have done a number of things, as you know, because we’ve highlighted them over time to create family packages where a family of four can visit the parks under relatively affordable circumstances for basically a week’s period of time. The price has been $1600 for that package without transportation. That’s pretty affordable, as far as we see it. So we think they have all combined to enable us to weather the store much better than others, much better than some have expected we could, and much better than we were able to in the past. Doug Mitchelson - Deutsche Bank: Great. Thank you very much.

Thanks, Doug. Operator, next question, please.

Your next question will come from the line of Mark Wienkes from Goldman Sachs. Mark Wienkes - Goldman Sachs: Thank you. I’m just wondering, could you talk to some of the levers you have with respect to the variable costs at the parks? We’ve heard some chatter about maybe reducing the number of nights fireworks are displayed, et cetera. Sort to given that this economic slowdown didn’t really sneak up on anyone, how much leeway do you have with respect to attendance pressure should it arise to be able to sustain the margins and the experience for the guests? Thomas O. Staggs: I think the first thing to know is that the parks will set the schedule for things like fireworks and shows, park hours, et cetera, based on where demand is, what time of -- what season of the year and the inherent seasonality in the parks business, et cetera, with the fundamental goal of making sure that first and foremost, they are delivering the great guest experience that Bob referenced in the previous question. Having said that, to the extent that there is a need to adjust to demand in that way, it’s everything from show times to park operating hours to number of shows in a day to the number of carts selling food and beverage in the park. So there are a number of levers they can go to. We’re quick to add that there’s a high fixed cost component to our parks business. There’s no question about that. But we’ve got an extraordinarily experience parks team and they are very good on the one hand at yield management, as you’ve seen in the strong results that have been posted so far, and they are quite good at monitoring the cost side and striking that proper balance between maintaining great guest experience and optimizing their cost base. So there’s levers they can pull. Some are easier to pull at different times of the year than others. So if we are in the middle of a true peak season, you won’t see much change in that regard because the parks will be quite full, and that of course has been our experience thus far this summer. Mark Wienkes - Goldman Sachs: Understood. That’s great. Thank you.

Thank you, Mark. Operator, next question, please.

Your next question will come from the line of Benjamin Swinburne from Morgan Stanley. Benjamin Swinburne - Morgan Stanley: Thanks for the question. I’ll ask two, one is just a point of clarification, Tom, on the park side; corporate alliance income, could you just give us a sense of order of magnitude there and a little more color on what drove that in the quarter? And then on the advertising front, strong results at ESPN again. Obviously the ratings have been very good there. Any sense at this point on up-front commitments turning into orders towards the -- as we get into the fall? I think everyone is nervous about national ad spend. You’ve got some auto exposure at ESPN. We’ve heard all the noise on that front. Just what your sense is for your big advertisers on ABC, ESPN, as we head into the back half of the calendar year. Thomas O. Staggs: Sure. On the second question, as you know, we were quite pleased with the up-front at ABC, mid- to high-single-digit CPM increases and really a good response to the schedule overall. And to date, I haven’t heard anything that would give us pause to think that that wasn’t as strong enough as we thought it would be or that something has changed with regard to the nature of the orders or the intention of the folks who have placed those orders, so we feel good about the up-front from that standpoint. The corporate alliance income, I think the best way to think about that is that if you take a look at -- of course, we have corporate alliance income every quarter. The fact is that there was some that we mentioned in the release this quarter having to do with renewal of certain contracts that caused revenue recognition to be accelerated into the quarter and therefore was less of a recurring number than sort of the normal activity. And so if you look through that and a couple of the other more unusual items, I think the best way to look at the parks’ results is that that pretty much cancelled out the economic effect of Easter, and so you can read the parks’ results pretty well on their face in that regard. We highlight the attendance impact of Easter in the comments just to get a sense of those trends but from the standpoint of the strong economic results you saw at the parks, those actually stand up to scrutiny pretty well. I think you asked about the ESPN up-front. Again, here again we were pleased, mid- to high-single-digit CPM increases and good volumes of activity, so there we feel quite good. Benjamin Swinburne - Morgan Stanley: Thanks a lot.

Thanks, Ben. Operator, next question, please.

Your next question will come from the line of Michael Morris from UBS. Michael Morris - UBS: Thank you. Following up on the comment at the parks regarding the advance bookings, can you give us a sense of the magnitude of how much of total attendance would be booked at this point for September and December? I don’t know if you can get specific, or at least give a feel for how much of that booking you already have. And then second, on the revenue side at the parks, can you talk a little bit about how you would view the use of promotions or price cutting relative to any weakness in travel trends, or whether you feel that -- is it more important to keep pricing steady if there’s weakness in demand, or would you consider promotions in the face of that? Thanks. Robert A. Iger: Well, I’ll take the second part of the question, Michael. You know, we typically in what we’ll consider to be shoulder periods or off-peak periods do some discounting. There are a number of weeks during the year that we do that and in the period that we talked about, which is the current quarter and the first quarter, there isn’t anymore discounting going on then there was in the previous year, really. So the pattern that we see in terms of our bookings are not being impacted by greater discounting. We don’t really break down when we talk about our bookings what percentage those bookings would represent of what we expect our total attendance to be. It’s just not something we do. We know how many room nights we have on the books versus last year and when we make our comparisons to last year, that’s what we base the comparisons on but we don’t project what percentage of our expected attendance those represent. I think you can expect though, because we are already well into the quarter, that when we talk about a quarter that is roughly on par with last year from a bookings perspective that we’re well into the quarter in terms of the percentage that those bookings would represent of our total attendance. And the first quarter -- Thomas O. Staggs: Yeah, I would say the same for the first fiscal quarter, only because it’s an important holiday season and people tend to plan that and book that in advance. So there is a meaningful percentage of total occupancy on the books at this point, so it’s a reasonably good indicator of where at least things stand today. Robert A. Iger: Going back to your question about discounting, how important is the whole prices versus I guess attracting more people, as we’ve mentioned a number of times, we have a very sophisticated revenue management or yield management system for trading -- basically it’s a software program that essentially sells primarily our rooms, although we do now use it for some of our other businesses, and it makes millions of decisions in terms of rates based on demand. And that system essentially is designed to maximize revenue and I think has done a very good job of that but as Tom, I think in your remarks you talked about -- I think -- did you talk about AVR in your remarks? Suggested that even with these bookings, we are experiencing actually a slight growth in our average daily rate, so it suggests that we are not discounting rooms. Thomas O. Staggs: Pricing for rooms on the books at this point are at or above the prior year. It varies a little bit by the different category but taken as a whole, we’re at or above the prior year into the pricing, so they are solid bookings and we feel good about where they stand. Michael Morris - UBS: Thank you.

Thank you, Mike. Operator, next question, please.

Your next question will come from the line of Michael Nathanson from Sanford Bernstein. Please proceed. Michael Nathanson - Sanford C. Bernstein: Thanks. I have one for Tom and then one for Bob; Tom, could you talk about that cable network advertising? Clearly there are concerns about cable. You didn’t see in the quarter but I wondered in the second quarter, how much of the growth at ESPN was coming from some of those events that, you know, Masters Open, Basketball that you mentioned? Was it a difference of footprint that may have driven the quarter versus last year? Thomas O. Staggs: Sure. The bottom line is that the events themselves, the success of the NBA, for example, was a benefit in the quarter but not a huge benefit, and the reason for that is that much of that inventory, of course, is sold well in advance in one of the up-fronts that ESPN does. Robert A. Iger: Before we even know the teams or -- Thomas O. Staggs: Before you know the teams, et cetera, and so -- Robert A. Iger: Or the number of games. Thomas O. Staggs: Yeah. I’m hopeful that the great success of the NBA Finals this year will bode well for the sale of the NBA play-offs for next year. I think that sets us up well but it didn’t have a big impact economically for the quarter we just reported. Michael Nathanson - Sanford C. Bernstein: Okay, and then for Bob, people are concerned about the high food cost inflation that you are seeing and I wondered if there’s a strategy to pass on maybe some of the food costs in the parks and hotels and how do you deal with the strategy of price elasticity for food costs? Robert A. Iger: Well, first of all the cost of what I’ll call commodities at our parks represents a very, very small percentage of the cost of our operations, under 5% -- actually, under 4%. So you’re not talking about a big swing factor. We are mindful of both the cost of the food to us and the cost that we pass on to our consumers. And based on some of the increases that we’ve seen, which is in the 7% to 10% range for certain food commodities, we’ve actually managed to deploy certain initiatives or strategies to mitigate that increased cost to us without having to pass it on to the consumer. If it goes up significantly more, continues to go up on an continuing basis, I imagine at some point we’ll have to pass that on but to date, we really haven’t had to do that. Thomas O. Staggs: If you look at Q3, food and beverage spending at both the parks and the hotels were up but they were only up by low single digit percentages, so just very modestly. Michael Nathanson - Sanford C. Bernstein: And fuel, too? Is fuel a large percentage of cost of goods sold? Thomas O. Staggs: If you look just at the cruise line itself, fuel is an important part of their cost base. So if you looked at the cost of fuel for the cruise line for 2007 versus what we would expect it to be for all of 2008, we might be up as much as -- a little over $20 million in costs for fuel for the cruise line for the year. And of course, that takes into account a pretty large increase in the cost of fuel, so we don’t necessarily expect that increase to repeat itself. Robert A. Iger: There are also things that we do in terms of the way we operate that mitigate the increased expense. So for instance, on the cruise ships, we changed some itineraries. We actually vary our speed. We reduce our speed somewhat and we take other steps just to make the ships more fuel efficient -- a reduction in energy use would be one way to do that. Thomas O. Staggs: Right, but for the rest of the parks operation, it again gets into a very small component of the overall cost base when you look at it that way. Michael Nathanson - Sanford C. Bernstein: Okay. Thanks.

Okay, Michael, thank you. Operator, next question, please.

Your next question will come from the line of Jessica Reif-Cohen from Merrill Lynch. Jessica Reif-Cohen - Merrill Lynch: Thank you. I have two questions; can you size your music business for us? And do you participate in any of the concerts? And then the second question is on advertising, it sounds like it really markedly weakened in the last few weeks domestically. Can you discuss what you are seeing outside of the U.S.? Robert A. Iger: Well, I don’t think we ever break out what our -- the bottom line of our music business is and we’re not going to now. We manage it as part of the studio but the generation of hits or successes in the music business has come from a very synergistic or holistic approach to managing or leveraging this talent, from the Disney Channel to Radio Disney to Disney Records or Hollywood Records. It’s obviously grown significantly over the last few years and has really turned into quite a nice success story for the company. We do participate, by the way, in some of the concert successes, either in the form or royalties from licensing or the form of licensing talent to concert promoters. So The Jonas Brothers, for instance, was not our concert but we participated in the success and are participating in the success that’s ongoing of that concert. And clearly with the way these properties are managed, Disney Channel, Radio Disney, Hollywood Records, Disney Records, the studio, we really believe that we’ve created some momentum and have become much more of a magnet for talent as well because of our demonstrated ability to launch new acts and to maximize success from the older ones like Miley and the Jonas Brothers to High School Musical to a number of the newer ones that have been coming out. And by the way, the Miley album was number one last week. We sold 371 million copies in the United States -- Thomas O. Staggs: Thousand. Robert A. Iger: Thousand. Thomas O. Staggs: Million would be nice. Robert A. Iger: Which is pretty strong. The second question was about the advertising, the recent softness, Jessica? Jessica Reif-Cohen - Merrill Lynch: Yeah, if you could -- it sounds like the U.S. dramatically weakened in the last few weeks and I was just wondering if you could discuss what you are seeing outside the U.S.? Robert A. Iger: First of all, I wouldn’t say dramatically. I’d just say we’ve noticed -- we’ve detected weakness, as Tom said in his remarks, at our stations, at ESPN, and nationally the television network due to weakness in three key categories; U.S. automotive lead the way, particularly their impact on our stations and ESPN; financials and consumer electronics. I also want to emphasize the fact that advertising represents only about 20% of our revenue, so while we are exposed, we’re less exposed than some of our peers in the media space. Outside the United States, we have very little exposure to advertising and I’m not aware that we’ve really experienced any real weakness. Thomas O. Staggs: I’m not sure we participate broadly enough in advertising outside the U.S. to really give you a great gauge on that. Robert A. Iger: A few of the Disney Channels are advertiser supported -- the family channels, the [Jet X] channels in Europe are advertiser supported and there’s a little bit of ESPN business that’s advertiser supported but it’s all relatively small and no one has made us aware that we are experiencing any weakness there. Thomas O. Staggs: One note I’d make just on the television stations is that it will be interest to see as the quarter and the first quarter next year develop because we have yet to see a lot of political ad money expressed at the local TV station level and I suspect it will be a bigger factor later in the quarter than it has been to date. How much of a factor, I couldn’t say at this point. Robert A. Iger: And we’ve also grown share in the local TV space, mostly because of the performance of our stations, which from a ratings perspective has been sensational.

Okay, thanks, Jessica. Operator, next question, please.

Your next question will come from the line of Imran Khan from J.P. Morgan. Imran Khan - J.P. Morgan: Thank you for taking my questions. Two questions; it seems like broadcast network audience overall declined again last season. Can you please talk about how you factored this into your programming spending for future, what impact would you see on ABC’s profitability if the audience continues to decline? And the second question is related to theme parks. It seems like the airlines are trying to cut capacity in the fourth quarter and beyond. Can you give us some sense what kind of correlation airline capacity and theme park attendance may or may not have? Thank you. Robert A. Iger: On the airline capacity, the load factors into Orlando are still relatively low compared with some of the more popular destinations in the country, like Las Vegas, Honolulu, and pricing as well of flights to Orlando, while not necessarily the cheapest around are among the cheapest. And so there has been some reduction in capacity going into Orlando but not to a point where the load factors are actually even equal to or have exceeded what exists into some other destinations. And so for the visitor to a Disney park that wants to fly, and just under 50% of our visitors are flying, they typically book early and there’s plenty of access for them to seats on planes. And it has not been a factor at all, nor do we envision in the near-term anyway that it will be a factor. Our guests only represent about 30% of basically the load factor of flights into Orlando, and again since they book early, it’s not really an issue. On the network cost side, one of the reasons why the ratings were down this past year was the writer’s strike but in general, the way we’re managing the network is, consider the fact that it continues to be a pretty challenging environment, particularly given the fact that it’s a single revenue stream business, and therefore costs have to be addressed, both on the operational side and on the programming side. And I don’t think that our costs from a programming perspective have been significantly reduced but they haven’t significantly increased either, nor do I believe that there is really room in that business to do so. But we’re programming the network fairly aggressively on a 52-week basis and believe that the balance of cost and anticipated or expected revenue is enough to continue to drive profitability in that business. Imran Khan - J.P. Morgan: Thank you, Bob.

Operator, next question.

Your next question will come from the line of Jason Helfstein from Oppenheimer. Jason Helfstein - Oppenheimer: Thanks. Another question on broadcasting and one on consumer products; given that the results of the strike [enabled] production deals and then I assume we’re going to re-cut them and looked at all of your program expenses, when you come into the fiscal fourth quarter next year, do you think you’ve been able to reset some of the cost levels so we’ll see better efficiency or more profitability at the broadcast level? And then on the consumer products, you talked about how this quarter, margins were impacted by the Disney Stores and that will continue into the fourth quarter, and as well your investment spending in the gaming. Can you give us a sense for next year, can we expect profit growth out of the Disney Stores and if there’s any comment on incremental investment spending on the videogames? Thanks. Thomas O. Staggs: Sure. First of all, with broadcasting, I would largely reiterate what Bob said -- the efforts that they went through during the work stoppage and since then frankly have been about addressing the cost base and being prudent about it. I wouldn’t say to you that there’s been a step function change, however, at all but on the margin, they are actually making sure that they are being as efficient as they can be, so therefore if you look a year out, I wouldn’t encourage you to look for a step function change in the cost base or the cost of programming. But again, it’s an ongoing process and one that Dan Sweeney and Steve [Firson] and the rest of the team are all focused on day in and day out, and it’s important to the future of the business. Robert A. Iger: They definitely took costs out of the system due to the writers’ guild strike and are not going to put some of those costs, notably costs associated with long-term production, creative commitments, they don’t intend to put those back into the system. Thomas O. Staggs: Exactly, so -- and on the margin, that helps. Robert A. Iger: The second was the consumer products question, the stores. Thomas O. Staggs: On consumer products, the bottom line is that we do -- as we mentioned, we expect the acquisition of stores to dampen profits to consumer products for the balance of the year but over time, we do expect the stores to be profitable. They overall bring the margin down and will continue to bring the margin down only because in the licensing business, the margins are extraordinarily high and being vertically integrated in specialty retail will naturally bring with it some lower margin dollars. However, we think overall the stores can be a good economic proposition. We expect to earn decent returns there. I don’t expect the stores, once we get them to more of a steady state level of profit to be a big driver of growth in the future. We don’t anticipate meaningfully increasing the footprint of stores, but we do think that they are important touch points with consumers that can be managed in a way that overall is accretive to not just earnings but to the company and its brand as a whole. Videogames, a little bit of a different story. We’ve been ramping up spending. If I had to make a guess right now, I had been saying that we would get close to $200 million of development spending this year. They are running slightly below that pace right now, so it’s probably more in the 180 to 190 range for the year in terms of development spending, given the pace that they are at at this moment. We’ll continue to ramp that up and over the next several years, we would look to get to something like $350 million a year in development spend as our investment in that business. And at that point, I think we’ll have a nice critical mass and it will be contributing nicely to earnings. This year, videogames won’t be a big driver of earnings one way or the other when you get down to the net bottom line, including that development spend. Jason Helfstein - Oppenheimer: Thank you.

Thanks, Jason. Operator, next question, please.

Your next question will come from the line of Tuna Amobi from Standard & Poor’s. Tuna Amobi - Standard & Poor’s: Thank you very much. My first question, I guess it’s for Bob; I’m a little bit surprised that the SAG situation is dragging on as long as it has, particularly given the progress that was made with the other unions. So given your unique perspective, what can you share with others to, you know, what’s different in this particular situation and how soon do you think we might see a resolution and what plans you guys have made, particularly on the film side, to try to mitigate this situation? And separately for Tom, I wanted to ask about some of the newer franchises. I think I recall about a year or so ago, you gave the guidance for those three primetime shows and I was really -- I appreciated the outlook for about $1 billion for those three primetimes shows. So in that regard, in that manner, is it possible that perhaps you can quantify some of the newer franchises like Hannah Montana and High School Musical? How much in operating income do you expect some of those franchises to add to Disney across all platforms say over the next five years, perhaps including Jonas Brothers as well? That would be appreciated. Robert A. Iger: Well, on the SAG front, as you know the industry has done deals with the directors and the writers and with AFTRA and in all three cases, those deals included terms that dealt with some of the more difficult and more contentious issues related to new media. And with that, the industry put forward a very comprehensive proposal to SAG during the negotiation that essentially mirrored on the new media front the terms that the other guilds had already agreed to, as well as addressing a number of other issues that were relevant just to SAG on old media issues. And SAG did not see fit to accept those terms, particularly on the new media side, which we found to be somewhat unfortunate, given the fact that other guilds have been able to accept the same terms. We find it difficult to offer to SAG terms that are different than those terms that the other guilds agreed to, and believe that the other terms that were offered were fair given the general circumstances and more than fair to this guild in particular. And so the negotiation basically ended I guess a couple of weeks ago and to my knowledge, there hasn’t been any real progress of any sort, or even attempted progress since then. So I don’t really have a prediction in terms of either how this impasse might be broken or where things might go but I can say that by and large at this point, it’s not having a particularly damaging impact on our business because we’ve decided to continue to move forward with at least a number of our productions, and until such time as we feel that’s not prudent, we’re going to continue to basically approach our business in that way. I don’t think that there is any work stoppage imminent, by the way. I think it would be a very, very difficult thing for a guild in this environment to take on and probably rather unpopular as well, but I don’t speak for that guild and I can’t really predict what they are going to do, except that I think it would be unlikely that you will see another work stoppage in the near-term. Thomas O. Staggs: With regard to television franchises, a couple of years ago we talked about shows created by ABC Studios and owned by the company and the pipeline of profits from those shows being sold in syndication and through other distribution windows. We talked about looking out over a five-year period or so and seeing $1 billion of profit potential. If we look out today over a similar period of time for again ABC’s stable of shows, we see a similar pipeline and similar profit potential -- that is, even though we’ve enjoyed some of the profits referenced earlier, the pipeline has been sort of refueled to the point that we still think that there’s a nice profit stream there for us in the future. Now, with regard to the other franchises you referenced, really the ones that have come out of the Disney Channel, when High School Musical came about, there was a decent amount of confusion in the marketplace as to how we might generate profitability off a franchise that was created from a network that didn’t charge advertising revenues and only charged affiliate fees, and so we talked, to help the market sort of size those types of opportunities -- by the way, High School Musical was clearly a phenomenon, was a great, great success and continues to be today, which shows the potential longevity of some of these franchises. But we talked about the fact that in the first year-and-a-half or so from its launch, it would generate a contribution of around $100 million in operating profit. We said earlier this year that we thought that High School Musical could contribute a similar amount in 2008 alone and that’s still an accurate statement. We haven’t gone so far as to size each of the opportunities and talk about each franchise individually and I wouldn’t do so today because the High School Musical example was to give an example. What’s really important to know is that what the Disney Channel is focused on doing is maintaining those franchises and having them be as long-lived as possible, like our other franchises, making sure that they are made available for all the other business units to capitalize on and they too then help extend their lives. But also to help develop a broad stable of those types of franchises so we continue to serve our audiences, both domestically and frankly internationally, because we talked a little bit about the importance of international Disney Channels in the quarter but also how important they are to our reach overall. And so that’s really sort of the business plan there in terms of those franchises, so they can be meaningful and they continue to be a big part of the game plan going forward. Tuna Amobi - Standard & Poor’s: Thank you.

Thanks, Tuna. Operator, next question, please.

Your next question will come from the line of David Miller from Caris & Company. David Miller - Caris & Company: Just housekeeping items -- Tom, if I assume that ESPN cable affiliate fee growth in the quarter was let’s call it plus 9% and ad revenues in the quarter were plus 11%, would I be accurate? I don’t think you gave specific [inaudible] on that, so if you can shed some color on that, that would be great. And then Bob, I’m curious about the per cap spending number at Disneyland being down 2% in the quarter, despite what looks to be very good hotel occupancy numbers during the quarter. Is that because Toy Story Mania at DCA opened in June and because maybe theoretically the sample visitor there throughout June might have been the local visitor, who tends to spend less? Or was there something else going on there? Thanks very much. Thomas O. Staggs: Let’s see -- on ESPN, I’m not going to go into more detail on the individual growth rates than I went through in the prepared remarks. But I did talk about low double-digit gains in advertising revenue, so obviously that was a big contributor but affiliate fee growth is still an important and healthy part of ESPN’s business overall. With regard to the per capita spending at Disneyland, I wouldn’t pin it on any one single factor. If you take a look at it, I don’t believe it was driven by a preponderance of resident attendance. There was somewhat lower merchandise spending in the quarter. That probably has more to do with the tail end of the 50th anniversary last year and not being in that celebration this year than anything else, but to tell you the truth, I wouldn’t necessarily say that was all of it either. But overall, I think that we are pleased with where the per caps came in as a whole and as you know, as I mentioned, we actually saw hotel spending up 5% in the quarter. So I think all in all, still pretty solid numbers there but I would have a hard time pinning down for you any one single cause of the modest decline in per capita spending at Disneyland. David Miller - Caris & Company: Okay. Thank you.

Okay, thanks, Dave. Operator, next question, please.

Your next question will come from the line of Rich Greenfield from Pali Capital. Rich Greenfield - Pali Capital: A question related to theme parks in a few pieces: one, your ticket prices anniversary the increase this coming weekend. I was wondering if you could give us thoughts on how you think about pricing going into next year; two, the impact of Disney Vacation Club with a new Disney Vacation Club supposedly opening up shortly, or being opened up for sale next to the Contemporary Hotel; and then lastly, you commented I think, Tom, on the strength of international attendance at the theme parks. I was wondering if you could give a sense, if you look at some of the other pieces of attendance, how you are doing in terms of domestic fly-in, Florida resident, and non-Florida drive traffic to the parks, that would be great. Thanks. Robert A. Iger: Our decisions on pricing was -- you are correct in citing kind of an anniversary looming in terms of a potential price change, are largely based on price value relationship that we offer our customers and since we’ve continued to invest nicely in the quality of the experience, the quality of the service, the quality of the entertainment attractions, we believe that we are delivering a significant value to our customers and I think that would be again the single greatest factor in our minds. To some extent, we also look at competitive circumstances and the competitive advantage that we have and we clearly believe that we haven’t given up any ground in that regard. Since we have not announced a change though, Rich, I’m not going to get anymore specific than that but that’s what we base the decision on, largely. On the vacation clubs, the focus right now on the vacation clubs is in selling the Animal Kingdom property, both the conversion of the vacation clubs in the Animal Kingdom Hotel, as well as the additional vacation club units that we are creating in a new building structure adjacent to that hotel, and therefore the focus is on selling that and that’s why we’ve made no other announcements, nor have we put any other new vacation properties online, meaning for sale. The third part of your question was regarding international attendance. Thomas O. Staggs: Yeah, international attendance was stronger. The best way to probably look at domestic tourism trends is when we again try to isolate the Easter impact, domestic attendance would have been about on par with the prior year, having made that adjustment. If you left Easter in, domestic attendance would be down a little but because that’s where Easter shows up the most. But if you correct for that, still solid attendance there, about on par with the prior year. The percentage versus fly/drive, it hasn’t shifted dramatically recently but as Bob said, it’s a little under 50% that fly in right now, so we continue to watch the trends but I guess our overall message is so far, so good. Rich Greenfield - Pali Capital: And could you just comment, DVC, what was the actual impact on earnings this quarter? Thomas O. Staggs: The pace of sales at DVC was pretty much on par with the prior year, so DVC wasn’t a big driver of change in the quarter but again, they had nice sales but they are about on par with the prior year. Rich Greenfield - Pali Capital: Thanks.

Thanks, Rich. Operator, I think we have time for one more question.

Your last question will come from the line of David Joyce with Miller Tabak & Company. David Joyce - Miller Tabak & Company: Thanks. Just a housekeeping question on the free cash flow -- is there anything unusual in the timing, maybe related to programming production that might be beneficial in later quarters? Thomas O. Staggs: Let’s see -- [I won’t comment] about later quarters. You did see evidence this quarter, if you break it down. Obviously the cash flow statement in the press release is a nine-month statement, just by convention. But the quarter evidenced higher net investment in film and television, just driven mostly by live action, spending on live action films at the studio but that’s really a timing issue more than anything else. And for the year as a whole, cash flow is in good shape, really driven by the higher earnings that we’ve been showing. David Joyce - Miller Tabak & Company: Thank you.

Okay, thanks, David. Thanks again, everyone, for joining us today. I want to note that a reconciliation of non-GAAP measures that were referred to on this call to equivalent GAAP measures can be found on our investor relations website. Let me also remind you that certain statements on this conference call may constitute forward-looking statements under the Securities laws. We make these statements on the basis of our views and assumptions regarding future events and business performance at the time we make them and we do not undertake any obligation to update these statements. Forward-looking statements are subject to a number of risks and uncertainties and actual results may differ materially from the results expressed or implied in light of a variety of factors, including factors contained in our annual report on Form 10-K and in other filings we make with the Securities and Exchange Commission. This concludes today’s third quarter conference call. Thank you, everyone, for joining us.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a wonderful day.