Credit Suisse - Anaylst Report

8/2/2019 Credit Suisse - Anaylst Report

1/15

DISCLOSURE APPENDIX CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, INFORMATION ONTRADE ALERTS, ANALYST MODEL PORTFOLIOS AND THE STATUS OF NON-U.S ANALYSTS. U.S. Disclosure:Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should beaware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.

07 February 2012

Americas/United States

Equity ResearchEntertainment

Walt Disney Company (DIS)INCREASE TARGET PRICE

Margins Exceed Expectations; FY1Q12 Review

Event: DIS reported better than expected FY1Q12 results driven by margin

upside. Revenue of $10.8 billion, was 1.4% below our $10.9 billion forecast.

However, EBIT of $2.4 billion (+11% Y/Y) surpassed our $2.3 billion

projection by 8%, due to upside at Studio and Cable Networks. As a result,

EPS of $0.80 vs. $0.68 was above our $0.72 forecast, helped also by a

lower than expected tax rate.

Investment Case: We note the bulk of the cable network upside was driven

by lower affiliate revenue deferrals. While this is in part timing-related, we

continue to believe that Disneys networks boast industry leading affiliate

pricing power (see our report Not All Cable Networks are Created Equal).

The Park recovery is on track with stronger than expected Park margin of

17.5% vs. 16.3%, ahead of our 16.9% forecast. This supports our view that

Park margins are not structurally broken (please see our note DIS: The

Theme Park Margin Riddlefor more details).

Catalysts: We are tweaking our FY12 EPS estimate higher by $0.02 to

$2.98 to reflect a lower tax rate. Our overall EBIT estimate is essentially

unchanged for the time being, as we prefer to be conservative, pending the

upcoming release of high budget film John Carter. Should this film perform

in-line to better than expectations, there could be upside to our projections

for the Studio.

Valuation: We maintain our Outperform rating on DIS as we view Disney asstrategically well-positioned. While the stocks recent strong run may limit

near term upside, assuming Disney can trade in-line with its five year

historical P/E multiple, or about a 1x PEG ratio, we are raising our price

target on Disney from $40 to $45.

Share price performance

29

34

39

44

Feb-11 May-11 Aug-11 Nov-11

Daily Feb 08, 2011 - Feb 07, 2012, 2/08/11 = US$41.18

Price Indexed S&P 500 INDEX

On 02/07/12 the S&P 500 INDEX closed at 1347.05

Quarterly EPS Q1 Q2 Q3 Q42011A 0.68 0.49 0.78 0.592012E 0.80 0.55 0.97 0.652013E

Financial and valuation metrics

Year 09/11A 09/12E 09/13E 09/14EEPS (CS adj.) (US$) 2.54 2.98 3.44 3.84Prev. EPS (US$) 2.96 3.46 3.92P/E (x) 16.1 13.7 11.9 10.7P/E rel. (%) 102.7 101.0 95.6 96.2Revenue (US$ m) 40,893.0 43,482.1 45,850.4 48,277.1EBITDA (US$ m) 10,336.7 11,195.3 12,163.7 12,997.1OCFPS (US$) 3.66 4.09 4.95 5.54P/OCF (x) 8.2 10.0 8.3 7.4EV/EBITDA (current) 7.1 6.6 6.0 5.6Net debt (US$ m) 10,792 12,367 11,920 11,182ROIC (%) 12.23 12.81 13.28 13.46

Number of shares (m) 1,789.77 IC (current, US$ m) 49,381.68BV/share (Next Qtr., US$) EV/IC (x) Net debt (Next Qtr., US$ m) Dividend (Next Qtr., US$) Net debt/tot cap (Next Qtr., %) 29.9 Dividend yield (%)

Source: Company data, Credit Suisse estimates.

Rating OUTPERFORM*Price (07 Feb 12, US$) 40.98Target price (US$) (from 40.00) 45.0052-week price range 44.07 - 29.00Market cap. (US$ m) 73,344.66Enterprise value (US$ m) 85,711.21*Stock ratings are relative to the relevant country benchmark.

Target price is for 12 months.

Research Analysts

Spencer Wang

212 325 [email protected]

Michael Senno

212 325 [email protected]


2/15

07 February 2012

Walt Disney Company (DIS) 2

Margins Exceed Expectations;FY1Q12 ReviewOverview

On February 7, Disney reported better than expected FY1Q12 results driven by margin

upside. Revenue amounted to $10.8 billion, up 0.6% year over year, but 1.4% below our

$10.9 billion forecast. However, operating income of $2.4 billion grew 11% year over year,

surpassing our $2.3 billion projection by 8%, with stronger than expected results at Studio

Entertainment and Cable Networks the primary drivers of the upside. As a result, EPS

amounted to $0.80 vs. $0.68, above our $0.72 forecast, boosted also by a lower than

expected tax rate (32.3% vs. our 35.0% forecast).

Key Takeaways

Park Thesis Continues to Play Out

Management indicated room reservations for the remainder of FY2Q12 (March 2012) are

tracking up mid single digits year over year, compared with about flat pacings for FY1Q12

provided on the FY4Q11 call. We view the park trends as solid, and as evidence of theongoing top-line recovery. In addition, room rates for the March quarter are also tracking

up mid single digits year over year. This supports our view that, assuming the economy

continues to hold up, Disney will be able to reduce discounting to drive pricing, which

should have a disproportionately positive impact on margin.

Exhibit 1: Y/Y % Change in Forward Bookings vs. Actual Attendance ChangeEarnings Call

FY4Q09 FY1Q10 FY2Q10 FY3Q10 FY4Q10 FY1Q11 FY2Q11 FY3Q11 FY4Q11 FY1Q12

Attendance Change in Next Qtr. 4% -4% -3% -6% 2% 0% 2% 1% 3% ?- Forward Bookings -5% -10% -10% -9% 5% 3% -2.5% -2.0% 0.0% 5.0%= Difference 9% 6% 7% 3% -3% -3% 5% 3% 3% ?

Source: Company data, Credit Suisse estimates. FY4Q09 excludes New Years holiday shift in actual attendance change. FY 1Q10 forward

bookings does not adjust for New Years holiday shift. FY2Q10 forward bookings and attendance does not adjust for Easter holiday shift. FY3Q10

forward bookings and attendance does not adjust for one less week in FY4Q10. On an adjusted basis, forward bookings were -1% and actual

attendance was +1%. FY1Q11 forward bookings and attendance does not adjust for Easter holiday shift. Adjusting for Easter, attendance was

+2% year over year.

To this end, in FY1Q12, Disneys Parks & Resorts EBIT margin continued to improve,

expanding to 17.5% vs. 16.3% and exceeding our 16.9% projection. This marks the

second consecutive quarter of a solid improvement in Park margins. We note that the

margin expansion comes despite ongoing reinvestment initiatives. This reinforces our

thesis that Park margins, while being impacted by some investments, are not structurally

broken (detailed in our October 13 th report The Theme Park Margin Riddle).

Lower Affiliate Revenue Deferrals Boot Cable Networks

We note that Cable Network performance in FY1Q12 was boosted by a lower amount of

affiliate revenue deferral vs. the prior year. More specifically, in FY1Q12, Disney deferred$190 million, compared with $266 million in the year ago quarter. Adjusting for this impact

alone (and not for the ad impact from the timing of sporting events, which we discuss

later), we estimate total cable network revenue growth was 5% (vs. 8% on a reported

basis) and EBIT growth was ~12% (vs. 25% on a reported basis). Given that this affiliate

revenue deferral is booked at a 100% margin, this accounted for the majority of the

positive variance in Cable Networks EBIT.


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07 February 2012


Exhibit 2: Impact of Affiliate Revenue Deferral, FY1Q12-FY1Q11

Cable Networks FY1Q11 FY 1Q12

Y/Y %

Growth

Reported Revenue $3,068 $3,309 7.9%

+ Affiliate Deferral $266 $190= Adjusted Revenue $3,334 $3,499 4.9%

Reported EBIT $771 $967 25.4%+ Affiliate Deferral $266 $190= Adjusted EBIT $1,037 $1,157 11.6%Adjusted EBIT Margin 31.1% 33.1%

Reported EBIT Margin 25.1% 29.2% Source: Company data, Credit Suisse estimates

Advertising Holding Up

Like past quarters, Disney provided some color on ad trends. For broadcast network

advertising, ABCs scatter pricing quarter to date in FY2Q12 is running up mid teens vs.

the upfront, although we note that scatter pricing is tighter for broadcast networks given

continued audience erosion, which reduces inventory.

ESPNs ad sales for the December quarter was flat year over year on a reported basis, butimproved 8% excluding the impact from the NBA lockout and the timing of the Fiesta and

Rose Bowls (which will fall in FY2Q in 2012). For the March quarter, Disney indicated that

ESPN ad sales are pacing up single digits, excluding the timing shift for the Fiesta and

Rose Bowls, while ABC Family is pacing up double digits year over year.

On the local TV advertising front, as expected, TV station advertising declined 20% year

over year on a reported basis. However, revenues were up 3% excluding political

advertising and the sale of the Flint and Toledo stations. On an actual basis (e.g., not

adjusting for the sale of the Flint and Toledo stations), the O&Os are pacing down single

digits year over year in the March quarter.

Exhibit 3: Disney Advertising Data PointsFY1Q11 FY2Q11 FY3Q11 FY4Q11 FY1Q12

IntraQtr.

Pacings Actual

IntraQtr.

Pacings Actual

IntraQtr.

Pacings Actual

IntraQtr.

Pacings Actual

IntraQtr.

Pacings Actual

ABC Scatter vs. Upfront Pricing 22% 24% 30% 41% +35% >+25% >+25% 25% 25% ?ESPN 10%+ 34% 10%+ 43% +Single Digits (1)% Up 4% Up FlatTV Station Advertising 10%+ 20% 10%+ 6% +Single Digits (8)% (5)% (11)% Down 3%

Source: Company data, Credit Suisse estimates. FY1Q11 ESPN advertising grew 27% excluding two extra BCS games. FY2Q11 ESPN

advertising grew 23% excluding 3 extra BCS games. FY3Q11 ESPN advertising grew +9% x-World Cup and Game 7 of NBA Finals in year ago

quarter. TV station advertising grew +2% excluding political in year ago quarter and divestiture of Flint and Toledo stations. FY4Q11 ESPN grew

advertising +7% ex-World Cup. FY1Q12 ESPN grew advertising 8% ex-NBA lockout and timing of Rose and Fiesta Bowls. TV station advertising

excludes political and sale of Flint and Toledo stations. On a reported basis, TV station advertising down 20%

Ongoing Shareholder Returns

Disney's balance sheet remains solid, finishing the quarter with net debt of approximately

$10.6 billion, or about a 1x leverage ratio based on LTM EBITDA (1.36x gross debt). InFY1Q12, Disney bought back about 23.3 million shares for $800 million (~$34.33 average

price). Fiscal year to date, Disney has repurchased back 33 million shares for $1.2 billion,

or roughly $36.36 per share. We note that on November 30, Disney boosted its annual

dividend by 50% to $0.60 per share.


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07 February 2012


Tweaking FY12 Estimates

Overall, we are raising our FY12 EPS estimate from $2.96 to $2.98, which represents 17%

year over year growth. Our estimate revision reflects the following elements:

Our companywide FY12 EBIT estimate is essentially unchanged at $9.6 billion (+9%

year over year). Despite the upside in the December quarter results, some of the

variance was timing-related (e.g., lower affiliate revenue deferral).

Notwithstanding the upside in Studio in FY1Q12, we are leaving our full year Studio

EBITA forecast unchanged for the time being, pending the upcoming release of high

budget film John Carter, which is fully-financed by DIS. Should this film perform in-line

to better than expectations, there could be upside to our projections for the Studio.

Among below the line items, we have lowered our corporate expense estimate for

FY12 by $10 million and our FY12 tax rate estimate from 35% to 33.6%, as Disneys

tax rate in FY1Q12 was only 32%.

Valuation and Investment Conclusion

We maintain our Outperform rating on Disney as we view the company as strategically

well-positioned. As discussed in our recent report Not All Cable Networks are CreatedEqual, we believe that Disneys cable programming assets have industry leading affiliate

pricing power. In addition, we are encouraged by the recent improvement in Park margins

and believe that Park investment initiatives will result in more sustainable long term growth

and improving returns for the Parks business.

Disney currently sells at a 13.7x P/E multiple on our FY12 estimate of $2.98. This remains

below Disneys 15x five year historical valuation range. In addition, Disney shares

currently trades at ~10% premium to its peers vs. its historical ~17% premium. Assuming

Disney can trade in-line with its five year historical P/E multiple, or about a 1x PEG ratio,

we are raising our target price on Disney from $40 to $45, which is supported by our DCF.


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07 February 2012


Exhibit 4: EBIT Estimate Changes, FY12E

September Fiscal Year 2011 Old

Y/Y %

Change New

Y/Y %

Change Variance ($) Variance (%)

EBITACable Networks $5,233.0 $5,628.6 7.6% $5,628.6 7.6% $0.0 0.0%+ Broadcasting $913.0 $905.1 -0.9% $884.6 -3.1% ($20.5) -2.3%= Media Networks $6,146.0 $6,533.7 6.3% $6,513.1 6.0% ($20.5) -0.3%+ Parks & Resorts $1,553.0 $1,833.2 18.0% $1,833.2 18.0% $0.0 0.0%+ Studio Entertainment $618.0 $624.2 1.0% $624.2 1.0% $0.0 0.0%

+ Consumer Products $816.0 $899.5 10.2% $899.5 10.2% $0.0 0.0%+ Interactive Media ($308.0) ($256.0) -16.9% ($256.5) NM ($0.5)= Total EBITA $8,825.0 $9,634.6 9.2% $9,613.5 8.9% ($21.0) -0.2%

Operating Margins

EBITA MarginCable Networks 40.6% 40.9% 40.9% 0.0%Broadcasting 15.6% 15.2% 15.0% -0.2%

Media Networks 32.8% 33.2% 33.1% 0.0%Theme Parks & Resorts 13.2% 13.9% 13.9% 0.0%Studio Entertainment 9.7% 9.7% 9.7% 0.0%Consumer Products 26.8% 28.4% 28.4% 0.0%Interactive Media -31.4% -24.5% -25.3% -0.8%

Total EBITA Margin 21.6% 22.1% 22.1% 0.0%

Revenues $40,893.0 $43,553.6 6.5% $43,482.1 6.3% ($71.5) -0.2%EBITA $8,825.0 $9,634.6 9.2% $9,613.5 8.9% ($21.0) -0.2%

Amortization Expense $0.0 $0.0 $0.0 $0.0Total Operating Income $8,825.0 $9,634.6 9.2% $9,613.5 8.9% ($21.0) -0.2%Corporate (Expense) ($459.0) ($482.0) 5.0% ($471.4) 2.7% $10.6 -2.2%Equity Income of Investees $0.0 $0.0 $0.0 $0.0Net Interest (Expense) ($343.0) ($426.0) 24.2% ($425.2) 24.0% $0.8 -0.2%Income b/f Taxes & Minority Interest $8,023.0 $8,726.6 8.8% $8,717.0 8.7% ($9.6) -0.1%Income Tax (Expense)/Benefit ($2,714.4) ($3,054.3) ($2,925.8) $128.5 -4.2%Minority Interest $0.0 $0.0 $0.0 $0.0Net Income (Loss) b/f Extraordinary Items $5,308.6 $5,672.3 $5,791.2 $118.9 2.1%Restructuring Charges/Extr. Items/Disc Ops (A ($50.6) $0.0 $0.0 $0.0Cumulative Effect of Accounting Changes $0.0 $0.0 $0.0 $0.0Net Income (Loss) a/f Extraordinary Items $5,258.0 $5,672.3 $5,791.2 $118.9 2.1%Net income attributable to noncontrolling intere ($451.0) ($473.6) ($473.6) $0.0Net income attributable to DIS shareholders $4,807.0 $5,198.8 $5,317.6 $118.9 2.3%

Diluted Shares Outstanding 1,909.0 1,754.9 1,784.0 -6.5% 29.1 1.7%

Diluted EPS b/f Extr. Items $2.54 $2.96 16.4% $2.98 17.1% $0.02 0.6%Diluted EPS a/f Extr. Items $2.52 $2.96 $2.98 0.0% Source: Company data, Credit Suisse estimates

Segment Review

Cable Networks

The cable networks segment reported revenue of $3.3 billion (+8% Y/Y), ahead of our

$3.2 billion forecast, boosted by lower affiliate revenue deferrals vs. last year. Similarly,

EBITA of $967 million (+25% Y/Y) also exceeded our $848 million estimate by 14%, due

to the 100% flow impact from lower affiliate revenue deferrals.

Reported ESPN advertising revenue was flat Y/Y, slightly below our low-single digit

estimate. We note that year over year comparisons were skewed by the NBA lock out and

the timing of the Fiesta and Rose Bowls in to FY2Q in 2012. Excluding these factors,advertising rose 8% year over year. Excluding the impact of the revenue deferrals, affiliate

revenue rose an estimated 7% year over year, consistent with our 6%-7% estimate. All

told, we estimate total organic cable revenue growth was about 7%.

Expenses in the quarter grew 2%, slightly better than our 3.3% estimate, with related BCS

and NBA costs pushed into FY2Q. Nonetheless, EBIT margin increased to 29.2% vs.

25.1%, above our 26.3% estimate, owing to the stronger than expected revenue result.

Excluding the affiliate revenue deferral issue, adjusted margins improved ~200 bps year

over year to 33.1%.


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07 February 2012


Broadcasting

Broadcasting revenue declined 6.8% Y/Y to $1.5 billion vs. our $1.6 billion estimate. ABC

network ad revenue was flat Y/Y with rate increases balanced by lower ratings. TV station

ad revenues fell 20% vs. -11% in FY4Q11, due to lower political spending and the sale of

the Flint and Toledo TV stations. Excluding these factors, station revenue was +3% year

over year. Costs decreased 3% Y/Y vs. our +2.3% projection, as lower programming costs

at the stations related to the end of The Oprah Winfrey Showoutweighed higher marketing

costs for new primetime shows. Nonetheless, given the revenue shortfall, EBITA marginscontracted ~330 bps to 15.4% vs. 18.7% a year ago and our 18.8% projection, and EBITA

fell 23.4% Y/Y to $226 million vs. our $303 million estimate.

Studio Entertainment

Disneys Studio EBITA of $413 million vs. $375 million significantly beat our $234 million

estimate. Revenues declined 16.3% year over year to $1.6 billion, close to our $1.5 billion

projection, due to a lighter theatrical release schedule and ongoing pressure in home

video revenue. In addition, The Muppetswas the only 100% owned new film released in

FY1Q12 compared to Tangledand Tron Legacylast year, while home video faced a tough

comparison against Toy Story 3.

However, the decrease revenue was more than offset by a 23% decline in operating costs

(we estimated an 18% drop in expenses) from less production and marketing costs.Disney also noted a $13 million year over year decline in film write downs. Consequently,

EBIT margin of 25.5% vs. 19.4% easily exceeded our 15.5% estimate.

Exhibit 5: Comparison of DIS's Theatrical and DVD Slate, FY1Q12 vs. FY1Q11F 1Q12 T hea tric al Mov ies R ele as es F 1Q 11 Th eatr ical M ovies Rel ea ses

Titl e Release Date Title Release Date

Real Stee l (Dreamworks) 10/7/2011 277 Secretariat 10/8 /2010 60

The Mup pets 11/23/2011 84 Tangle d 11/12/2010 591

Beauty a nd the Beast (re-release) Tron Legacy 12/17/2010 172War Horse (Dreamworks) 12/25/2011 45

F1Q12 Home Video Releases F1Q11 Home Vid eo Rele ases

Titl e Release Date 6.8 Title Release DateThe L ion King (re-release) 10/4/2011 Iron Man 2 9/28/2010 5

Pira tes o f the Caribb ean 4 10/18/2011 0.9 Prince of Persia: Sand of Time 9/14/2010Winnie the pooh 10/25/2011 Toy Story 3 11/2 /2010 9.3

Capta in America: the First Aveng er 10/25/2011 1.4 The Last Song 8/17/2010

Cars 2: World Grand Pirx 11/1/2011 4.5 A Christmas Caro l 11/16/2010 2.1Se arch for San ta Pa ws (direct t o DVD) 11/2 3/201 0 1.2

The Sorce rers App rentice 11/30/2010 1.9 Source: : boxofficemojo.com, Company data, Credit Suisse estimates

Theme Parks & Resorts

Reported Theme Park revenues grew 10% Y/Y to $3.155 billion, slightly below our $3.2

billion estimate. However, margins exceeded our expectations, as operating expenses

grew 8.4% in the quarter, below our +12% projection, despite higher costs related to the

Disney Dream, and continued expenses from growth projects such as the Shangai park.

Therefore, reported Parks margin of 17.5% vs. 16.3% a year ago was above our 16.9%

estimate. Consequently, EBITA of $553 million (+18% Y/Y) was ahead of our $547 million

estimate by 1%.

As expected, key revenue drivers include price and attendance increases at the parks,

incremental revenue from the Disney Dream cruise ship and the first full quarter of

revenue from the Aulani resort.

In terms of operating metrics, combined domestic attendance was +3%, a tad above our

2% estimate. Per cap spending at the parks grew +8% in FY1Q12, also higher than our

+4.5% expectation. At the hotels, occupancy was flat year over year at 85%, a touch

below our 86% assumption, partially offset by per room guest spending that grew 6%,

which beat our +5% estimate.


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07 February 2012


Consumer Products

Revenue grew 2.8% Y/Y to $948 million, under our $983 million estimate, while EBITA of

$313 million (0.3% Y/Y) was also below our estimate $333 million. Cars 2was the primary

revenue driver following its DVD release, while retail store sales benefited from the holiday

season uplift and new stores. However, lower operating cost growth of 4.1% Y/Y (vs. our

+6.6% Y/Y) offset some of the revenue shortfall. As a result, EBITA margin of 33.0% vs.

33.8% came in close to our 33.9% estimate.

Interactive Media

Revenue declined to $279 million vs. $349 million, below our $365 million estimate. The

EBITA loss of $28 million vs. -$13 million a year ago was higher than our $5 million loss

estimate. The revenue decline resulted from lower console game sales due in part to

fewer releases, a tough comp against Epic Mickey last year, and the continued shift of

users to other gaming platforms. A ~$13 million Y/Y decrease in purchase price

accounting related to the Playdom acquisition partly offset the revenue decline.

Exhibit 6: Comparative EV/EBITDA Multiples, 2012E-2013E

FY12E FY13E FY12E FY13E FY12E FY13E FY12E FY13E FY12E FY13E FY12E FY13E

Stock Price $40.98 $40.98 $38.10 $38.10 $48.80 $48.80 $19.71 $19.71 $43.10 $43.10 $27.09 $27.09

x Shares Outstanding 1,784 1,688 964 891 537 478 2,470 2,173 388 376 2,618 2,454

= Equity Market Cap $73,110.1 $69,170.4 $36,718.1 $33,931.6 $26,183.8 $23,343.6 $48,676.5 $42,822.1 $16,732.1 $16,189.8 $74,457.5 $74,457.5

+ Net Debt 12,366.6 11,919.9 17,001.1 19,216.8 7,378.5 8,741.5 6,317.3 9,351.1 3,540.3 3,148.1 34,721.0 34,721.0

+ Preferred Stock 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

+ Other Adjustments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

= Adjusted Enterprise Value 85,476.7 81,090.4 53,719.2 53,148.4 33,562.3 32,085.1 54,993.8 52,173.1 20,272.4 19,337.8 109,178.5 109,178.5

- Off Balance Sheet Assets (5,778.3) (5,778.3) (1,692.3) (1,692.3) (362.3) (362.3) (11,337.5) (11,337.5) (803.6) (803.6) (22,878.2) (22,878.2)

+ Minority Interest 7,369.5 7,369.5 0.0 0.0 0.0 0.0 999.7 1,184.9 0.0 0.0 3,448.8 3,448.8

= Enterprise Value 87,067.9 82,681.6 52,026.8 51,456.1 33,200.0 31,722.8 44,656.1 42 ,020.6 19,468.8 18,534.2 89,749.1 89,749.1

/ Fiscal Year EBITDA 10,103.8 10,999.1 7,041.8 7,527.6 4,389.0 4,720.3 6,874.7 7,535.0 2,139.5 2,359.4 19,733.7 20,581.5

= EV/EBITDA Multiple 8.6x 7.5x 7.4x 6.8x 7.6x 6.7x 6.5x 5.6x 9.1x 7.9x 4.5x 4.4x

NWSADIS TWX VIAB DISCA CMCSA

Source: Factset, Company data, Credit Suisse estimates

Exhibit 7: Comparative PE Multiples, 2012E-2013E


Stock Price $40.98 $40.98 $38.10 $38.10 $48.80 $48.80 $19.71 $19.71 $43.10 $43.10 $27.09 $27.09

/ EPS $2.98 $3.44 $3.30 $3.84 $4.37 $5.17 $1.35 $1.68 $2.90 $3.43 $1.81 $2.27

= P/E 13.7x 11.9x 11.6x 9.9x 11.2x 9.4x 14.6x 11.7x 14.8x 12.6x 15.0x 11.9x

/ 5 Year Growth Rate 14.4% 14.4% 13.0% 13.0% 20.4% 20.4% 24.5% 24.5% 17.1% 17.1% 16.1% 16.1%

= PEG 1.0x 0.8x 0.9x 0.8x 0.5x 0.5x 0.6x 0.5x 0.9x 0.7x 0.9x 0.7x

DIS NWSATWX VIAB DISCA CMCSA



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07 February 2012


Exhibit 8: Comparative P/FCF Multiples, 2012E-2013E


Net Income $5,791 $6,307 $3,169 $3,413 $2,380 $2,513 $3,247 $3,652 $1,127 $1,289

+ D&A 1,924.5 2,011.0 969.5 1,018.4 280.9 293.0 1,271.5 1,327.1 121.1 124.1

+ Other Non-Cash Charges 595.0 627.0 7,211.4 7,392.8 4,911.5 4,917.8 159.3 (48.6) 851.9 880.5

+ Changes in Working Cap (1,008.6) (588.2) (8,035.7) (8,206.6) (5,118.5) (5,360.2) (849.5) (603.0) (943.3) (1,015.0)

= C/F from Ops 7,302.1 8,356.9 3,314.3 3,617.8 2,454.2 2,363.4 3,828.4 4,327.4 1,157.2 1,278.4

- CAPEX 4,057.1 2,843.4 717.8 761.2 173.2 181.1 1,214.3 1,242.8 54.2 57.2- Preferred Dividend 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

= Levered FCF 3,245.0 5,513.4 2,596.5 2,856.6 2,281.1 2,182.3 2,614.0 3,084.7 1,103.0 1,221.2 7,632.8 8,339.2

/ EBITDA 10,103.8 10,999.1 7,041.8 7,527.6 4,389.0 4,720.3 6,874.7 7,535.0 2,139.5 2,359.4 19,733.7 20,581.5

= LFCF/EBITDA Conversion 32.1% 50.1% 36.9% 37.9% 52.0% 46.2% 38.0% 40.9% 51.6% 51.8% 38.7% 40.5%

Levered Free Cash Flow $3,245.0 $5,513.4 $2,596.5 $2,856.6 $2,281.1 $2,182.3 $2,614.0 $3,084.7 $1,103.0 $1,221.2 $7,632.8 $8,339.2

/ Shares Outstanding 1,784.0 1,687.9 963.7 890.6 536.6 478.4 2,470.0 2,172.9 388.2 375.6 2,617.6 2,454.0

= Free Cash Flow per Share $1.82 $3.27 $2.69 $3.21 $4.25 $4.56 $1.06 $1.42 $2.84 $3.25 $2.92 $3.40

Stock Price $40.98 $40.98 $38.10 $38.10 $48.80 $48.80 $19.71 $19.71 $43.10 $43.10 $27.09 $27.09

/ Free Cash Flow per Share $1.82 $3.27 $2.69 $3.21 $4.25 $4.56 $1.06 $1.42 $2.84 $3.25 $2.92 $3.40

= P/FCF Multiple 22.5x 12.5x 14.1x 11.9x 11.5x 10.7x 18.6x 13.9x 15.2x 13.3x 9.3x 8.0x

1 1 1 1 1 1 1 1 1 1 1 1 1

/ P/FCF Multiple 22.5x 12.5x 14.1x 11.9x 11.5x 10.7x 18.6x 13.9x 15.2x 13.3x 9.3x 8.0x

= FCF Yield 4.4% 8.0% 7.1% 8.4% 8.7% 9.3% 5.4% 7.2% 6.6% 7.5% 10.8% 12.5%

NWSADIS TWX VIAB DISCA CMCSA



9/15

07 February 2012


Exhibit 9: Disney Quarterly Segment Revenue and EBITA Breakdown, FY2010-FY2012E1Q (Dec.) 2Q (March) 3Q (June) 4Q (Sept.)

September Fiscal Year 2009 2010 2011 2010 2011 2012E 2010 2011 2012E 2010 2011 2012E

RevenueCable Networks $2,654.0 $3,068.0 $3,309.0 $2,412.0 $2,826.0 $3,108.6 $3,280.0 $3,516.0 $3,727.0 $3,129.0 $3,467.0 $3,615.9

+ Broadcasting $1,521.0 $1,577.0 $1,470.0 $1,432.0 $1,496.0 $1,521.3 $1,449.0 $1,433.0 $1,474.1 $1,285.0 $1,331.0 $1,431.1= Media Ne twork s $ 4,1 75 .0 $4 ,6 45.0 $4 ,77 9.0 $3 ,84 4.0 $4,32 2.0 $ 4,6 29 .9 $ 4,729 .0 $ 4,9 49 .0 $5 ,20 1.1 $4 ,41 4.0 $4,798 .0 $ 5,0 46 .9

+ Parks & Resorts $2,662.0 $2,868.0 $3,155.0 $2,449.0 $2,630.0 $2,809.1 $2,831.0 $3,170.0 $3,635.3 $2,819.0 $3,129.0 $3,620.0+ Studio Entertainment $1,935.0 $1,932.0 $1,618.0 $1,536.0 $1,340.0 $1,444.9 $1,639.0 $1,620.0 $1,669.6 $1,591.0 $1,459.0 $1,689.1

+ Consumer Products $746.0 $922.0 $948.0 $596.0 $626.0 $650.1 $606.0 $685.0 $713.5 $730.0 $816.0 $859.6

+ Interactive Media $221.0 $349.0 $279.0 $155.0 $159.0 $182.9 $197.0 $251.0 $288.7 $188.0 $223.0 $262.4= Total Revenue $9,739 .0 $10 ,716.0 $10 ,779.0 $8 ,580.0 $9,077.0 $9,716 .8 $10,002 .0 $10,675 .0 $11 ,508.2 $9 ,742.0 $10,425 .0 $11,478 .0

EBITA

Cable Networks $544.0 $771.0 $967.0 $1,183.0 $1,357.0 $1,383.3 $1,676.0 $1,844.0 $2,065.3 $1,070.0 $1,261.0 $1,213.0+ Broadcasting $180.0 $295.0 $226.0 $123.0 $167.0 $181.3 $209.0 $250.0 $265.4 $147.0 $201.0 $211.9

= Media Ne twork s $7 24 .0 $1 ,0 66.0 $ 1,19 3.0 $1 ,30 6.0 $ 1,52 4.0 $ 1,5 64 .7 $ 1,885 .0 $ 2,0 94 .0 $2 ,33 0.6 $1 ,21 7.0 $1,462 .0 $ 1,4 24 .8+ Parks & Resorts $375.0 $468.0 $553.0 $150.0 $145.0 $126.4 $477.0 $519.0 $618.0 $316.0 $421.0 $535.8

+ Studio Entertainment $243.0 $375.0 $413.0 $223.0 $77.0 $74.9 $123.0 $49.0 $56.2 $104.0 $117.0 $80.1+ Consumer Products $243.0 $312.0 $313.0 $133.0 $142.0 $152.9 $117.0 $155.0 $179.9 $184.0 $207.0 $253.7

+ Interactive Media ($10.0) ($13.0) ($28.0) ($55.0) ($115.0) ($77.0) ($65.0) ($86.0) ($71.8) ($104.0) ($94.0) ($79.7)= Tota l EBITA $ 1,5 75 .0 $2,2 08. 0 $2,44 4.0 $1 ,757. 0 $1, 773.0 $ 1,841.9 $2, 537 .0 $ 2,7 31 .0 $3,11 2.9 $1,71 7.0 $2, 113 .0 $2,2 14 .7

Y/Y % Change

Revenues

Cable Networks 8.2% 15.6% 7.9% 9.4% 17.2% 10.0% 28.0% 7.2% 6.0% -6.2% 10.8% 4.3%

Broadcasting 4.8% 3.7% -6.8% 1.1% 4.5% 1.7% 3.6% -1.1% 2.9% -7.5% 3.6% 7.5%Media Networks 7.0% 11.3% 2.9% 6.2% 12.4% 7.1% 19.4% 4.7% 5.1% -6.6% 8.7% 5.2%Theme Parks & Resorts -0.1% 7.7% 10.0% 1.7% 7.4% 6.8% 2.9% 12.0% 14.7% -0.9% 11.0% 15.7%

Studio Entertainment -0.5% -0.2% -16.3% 7.0% -12.8% 7.8% 30.0% -1.2% 3.1% 6.4% -8.3% 15.8%Consumer Products -3.5% 23.6% 2.8% 20.2% 5.0% 3.9% 18.8% 13.0% 4.2% 13.0% 11.8% 5.3%

Interactive Media -29.4% 57.9% -20.1% 20.2% 2.6% 15.0% 74.3% 27.4% 15.0% 19.7% 18.6% 17.7%Total Revenues 1.5% 10.0% 0.6% 6.1% 5.8% 7.0% 16.4% 6.7% 7.8% -1.3% 7.0% 10.1%

EBITA

Cable Networks 5.2% 41.7% 25.4% 3.4% 14.7% 1.9% 50.3% 10.0% 12.0% -27.8% 17.9% -3.8%Broadcasting 30.4% 63.9% -23.4% -24.1% 35.8% 8.6% 2.5% 19.6% 6.1% NM 36.7% 5.4%

Media Networks 10.5% 47.2% 11.9% 0.0% 16.7% 2.7% 42.9% 11.1% 11.3% -18.0% 20.1% -2.5%Theme Parks & Resorts -1.8% 24.8% 18.2% -12.3% -3.3% -12.8% -8.4% 8.8% 19.1% -8.1% 33.2% 27.3%Studio Entertainment 29.9% 54.3% 10.1% 1615.4% -65.5% -2.7% -1125.0% -60.2% 14.6% -900.0% 12.5% -31.5%

Consumer Products -8.3% 28.4% 0.3% 37.1% 6.8% 7.7% 21.9% 32.5% 16.1% 21.9% 12.5% 22.6%Interactive Media NM NM NM NM NM NM NM NM NM NM NM NM

Total EBITA 9.1% 40.2% 10.7% 15.1% 0.9% 3.9% 37.2% 7.6% 14.0% -7.3% 23.1% 4.8%

Operating Margins

EBITA MarginCable Networks 20.5% 25.1% 29.2% 49.0% 48.0% 44.5% 51.1% 52.4% 55.4% 34.2% 36.4% 33.5%

Broadcasting 11.8% 18.7% 15.4% 8.6% 11.2% 11.9% 14.4% 17.4% 18.0% 11.4% 15.1% 14.8%Media Networks 17.3% 22.9% 25.0% 34.0% 35.3% 33.8% 39.9% 42.3% 44.8% 27.6% 30.5% 28.2%

Theme Parks & Resorts 14.1% 16.3% 17.5% 6.1% 5.5% 4.5% 16.8% 16.4% 17.0% 11.2% 13.5% 14.8%Studio Entertainment 12.6% 19.4% 25.5% 14.5% 5.7% 5.2% 7.5% 3.0% 3.4% 6.5% 8.0% 4.7%

Consumer Products 32.6% 33.8% 33.0% 22.3% 22.7% 23.5% 19.3% 22.6% 25.2% 25.2% 25.4% 29.5%Interactive Media -4.5% -3.7% -10.0% -35.5% -72.3% -42.1% -33.0% -34.3% -24.9% -55.3% -42.2% -30.4%Total EBITA Margin 16.2% 20.6% 22.7% 20.5% 19.5% 19.0% 25.4% 25.6% 27.0% 17.6% 20.3% 19.3%

Source: Company data, Credit Suisse estimates


10/15

07 February 2012


Exhibit 10: Disney Annual Segment Revenue and EBITA Breakdown, FY2009-FY2017ECAGR

September Fiscal Year 2009 2010 2011 2012E 2013E 2014E 2015E 2016E 2017E '12-'17

RevenueCable Networks $10,555.0 $11,475.0 $12,877.0 $13,760.4 $14,841.6 $16,009.7 $17,271.9 $18,636.0 $20,110.6 7.9%

+ Broadcasting $5,654.0 $5,687.0 $5,837.0 $5,896.5 $5,978.8 $6,081.3 $6,185.8 $6,292.1 $6,400.3 1.7%= Media Networks $16,209.0 $17,162.0 $18,714.0 $19,656.9 $20,820.3 $22,091.0 $23,457.6 $24,928.1 $26,510.9 6.2%

+ Parks & Resorts $10,667.0 $10,761.0 $11,797.0 $13,219.4 $14,125.6 $14,864.7 $15,646.5 $16,470.8 $17,343.0 5.6%

+ Studio Entertainment $6,136.0 $6,701.0 $6,351.0 $6,421.6 $6,485.4 $6,686.0 $6,935.4 $6,952.5 $6,864.2 1.3%+ Consumer Products $2,425.0 $2,678.0 $3,049.0 $3,171.2 $3,323.9 $3,450.5 $3,580.0 $3,715.2 $3,856.3 4.0%+ Interactive Media $712.0 $761.0 $982.0 $1,012.9 $1,095.2 $1,184.9 $1,282.6 $1,389.0 $1,505.1 8.2%

= Total Revenue $36,149.0 $38,063.0 $40,893.0 $43,482.1 $45,850.4 $48,277.1 $50,902.1 $53,455.6 $56,079.5 5.2%

EBITA

Cable Networks $4,259.0 $4,473.0 $5,233.0 $5,628.6 $6,142.1 $6,649.9 $7,075.9 $7,695.1 $8,365.0 8.2%+ Broadcasting $506.0 $659.0 $913.0 $884.6 $898.1 $927.8 $944.3 $960.8 $977.2 2.0%

= Media Network s $ 4,7 65 .0 $5,13 2.0 $6, 146 .0 $6,5 13 .1 $7 ,04 0.2 $7, 577 .7 $ 8,0 20.2 $8,65 5.9 $9, 342 .2 7.5%+ Parks & Resorts $1,418.0 $1,318.0 $1,553.0 $1,833.2 $2,070.5 $2,276.9 $2,475.9 $2,688.1 $2,915.6 9.7%

+ Studio Entertainment $175.0 $693.0 $618.0 $624.2 $599.6 $507.0 $485.9 $510.0 $453.9 -6.2%+ Consumer Products $609.0 $677.0 $816.0 $899.5 $1,014.9 $1,086.8 $1,160.8 $1,230.7 $1,295.4 7.6%

+ Interactive Media ($295.0) ($234.0) ($308.0) ($256.5) ($215.7) ($181.3) ($142.4) ($98.4) ($48.5) -28.3%

= Tota l EBITA $6,672 .0 $7 ,586.0 $8,825 .0 $9,613 .5 $10 ,509.5 $11,267 .0 $12,000 .4 $12 ,986.4 $13,958 .6 7.7%

Y/Y % Change

Revenues

Cable Networks 5.1% 8.7% 12.2% 6.9% 7.9% 7.9% 7.9% 7.9% 7.9%Broadcasting -2.8% 0.6% 2.6% 1.0% 1.4% 1.7% 1.7% 1.7% 1.7%

Media Networks 2.2% 5.9% 9.0% 5.0% 5.9% 6.1% 6.2% 6.3% 6.3%Theme Parks & Resorts -7.3% 0.9% 9.6% 12.1% 6.9% 5.2% 5.3% 5.3% 5.3%

Studio Entertainment -16.5% 9.2% -5.2% 1.1% 1.0% 3.1% 3.7% 0.2% -1.3%Consumer Products 0.4% 10.4% 13.9% 4.0% 4.8% 3.8% 3.8% 3.8% 3.8%

Interactive Media -1.0% 6.9% 29.0% 3.1% 8.1% 8.2% 8.2% 8.3% 8.4%Total Revenues -4.5% 5.3% 7.4% 6.3% 5.4% 5.3% 5.4% 5.0% 4.9%

EBITA

Cable Networks 2.9% 5.0% 17.0% 7.6% 9.1% 8.3% 6.4% 8.8% 8.7%Broadcasting -39.9% 30.2% 38.5% -3.1% 1.5% 3.3% 1.8% 1.7% 1.7%

Media Networks -4.3% 7.7% 19.8% 6.0% 8.1% 7.6% 5.8% 7.9% 7.9%Theme Parks & Resorts -25.3% -7.1% 17.8% 18.0% 12.9% 10.0% 8.7% 8.6% 8.5%Studio Entertainment -83.9% 296.0% -10.8% 1.0% -3.9% -15.4% -4.2% 5.0% -11.0%

Consumer Products -21.7% 11.2% 20.5% 10.2% 12.8% 7.1% 6.8% 6.0% 5.3%Interactive Media NM NM NM NM NM NM NM NM NM

Total EBITA -21.4% 13.7% 16.3% 8.9% 9.3% 7.2% 6.5% 8.2% 7.5%

Operating Margins

EBITA MarginCable Networks 40.4% 39.0% 40.6% 40.9% 41.4% 41.5% 41.0% 41.3% 41.6%

Broadcasting 8.9% 11.6% 15.6% 15.0% 15.0% 15.3% 15.3% 15.3% 15.3%Media Networks 29.4% 29.9% 32.8% 33.1% 33.8% 34.3% 34.2% 34.7% 35.2%

Theme Parks & Resorts 13.3% 12.2% 13.2% 13.9% 14.7% 15.3% 15.8% 16.3% 16.8%Studio Entertainment 2.9% 10.3% 9.7% 9.7% 9.2% 7.6% 7.0% 7.3% 6.6%

Consumer Products 25.1% 25.3% 26.8% 28.4% 30.5% 31.5% 32.4% 33.1% 33.6%Interactive Media -41.4% -30.7% -31.4% -25.3% -19.7% -15.3% -11.1% -7.1% -3.2%Total EBITA Margin 18.5% 19.9% 21.6% 22.1% 22.9% 23.3% 23.6% 24.3% 24.9%



11/15

07 February 2012


Exhibit 11: Disney Quarterly Income Statement, FY2010-FY2012E1Q (Dec.) 2Q (March) 3Q (June) 4Q (Sept.)

2009 2010 2011 2010 2011 2012E 2010 2011 2012E 2010 2011 2012E

Revenues $9,739.0 $10,716.0 $10,779.0 $8,580.0 $9,077.0 $9,716.8 $10,002.0 $10,675.0 $11,508.2 $9,742.0 $10,425.0 $11,478.0EBITA $1, 575.0 $2,208. 0 $2,444.0 $1, 757.0 $1,773.0 $1,841.9 $2,537. 0 $ 2,731.0 $3,112.9 $1,717.0 $2, 113.0 $2,214.7

Amortization Expense $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0Total Operat ing Income $1,575 .0 $2,208.0 $2 ,444.0 $1,757 .0 $1 ,773.0 $1,841 .9 $2 ,537.0 $2,731 .0 $3 ,112.9 $1 ,717.0 $2,113.0 $2,214 .7

Corporate (Expense) ($72.0) ($112.0) ($107.0) ($91.0) ($122.0) ($128.1) ($119.0) ($101.0) ($106.1) ($138.0) ($124.0) ($130.2)Equity Income of Investees $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Net Interest (Expense) ($103.0) ($95.0) ($90.0) ($130.0) ($83.0) ($106.3) ($89.0) ($88.0) ($106.3) ($87.0) ($77.0) ($122.6)

Income b/f Taxes & Minority Interest $1,400.0 $2,001.0 $2,247.0 $1,536.0 $1,568.0 $1,607.5 $2,329.0 $2,542.0 $2,900.6 $1,492.0 $1,912.0 $1,961.9Income Tax (Expense)/Benefit ($505.6) ($654.0) ($726.0) ($537.0) ($558.0) ($546.6) ($829.7) ($860.0) ($986.2) ($493.0) ($642.4) ($667.0)Minority Interest $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0Net Income (Loss) b/f Extraordinary Ite $894.4 $1,347.0 $1,521.0 $999.0 $1,010.0 $1,061.0 $1,499.3 $1,682.0 $1,914.4 $999.0 $1,269.6 $1,294.9

Restructuring Charges/Extr. Items/Disc O ($50.4) ($13.0) $0.0 $0.0 $0.0 $0.0 $0.0 ($19.0) $0.0 $33.0 ($18.6) $0.0Cumulative Effect of Accounting Changes $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $5.7 $0.0 $0.0 $0.0 $0.0 $0.0

Net Income (Loss) a/f Extraordinary Ite $844.0 $1,334.0 $1,521.0 $999.0 $1,010.0 $1,061.0 $1,505.0 $1,663.0 $1,914.4 $966.0 $1,251.0 $1,294.9Net income attributable to noncontrolling i $0.0 ($32.0) ($57.0) ($45.0) ($68.0) ($71.4) ($174.0) ($187.0) ($196.4) ($131.0) ($164.0) ($148.8)

Net income attributable to DIS sharehol $844.0 $1,302.0 $1,464.0 $954.0 $942.0 $989.6 $1,331.0 $1,476.0 $1,718.0 $835.0 $1,087.0 $1,146.1Diluted Shares Outstanding 1,903.0 1,927.0 1,824.0 1,973.0 1,934.0 1,791.5 1,978.0 1,912.0 1,771.0 1,941.0 1,864.0 1,750.5

Diluted EPS b/f Extr. Items $0.47 $0.68 $0.80 $0.48 $0.49 $0.55 $0.67 $0.78 $0.97 $0.45 $0.59 $0.65


Exhibit 12: Disney Annual Income Statement, FY2009-FY2017E

CAGR2009 2010 2011 2012E 2013E 2014E 2015E 2016E 2017E '12-'17

Revenues $36,149.0 $38,063.0 $40,893.0 $43,482.1 $45,850.4 $48,277.1 $50,902.1 $53,455.6 $56,079.5 5.2%EBITA $6,672.0 $7,58 6. 0 $8,825.0 $ 9,613.5 $10,509.5 $11,267.0 $12, 000.4 $12,986.4 $13 ,958.6 7.7%

Amortization Expense $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0Total Operat ing Income $6,672.0 $7,586.0 $8,825.0 $9,613.5 $10,509.5 $11,267.0 $12,000.4 $12,986.4 $13,958.6 7.7%

Corporate (Expense) ($398.0) ($420.0) ($459.0) ($471.4) ($494.9) ($519.7 ) ($545.6) ($572.9) ($601.6)Equity Income of Investees $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Net Interest (Expense) ($466.0) ($409.0) ($343.0) ($425.2) ($458.6) ($445.0) ($425.9) ($397.5) ($358.3) -3.4%Income b/f Taxes & Minority Interest $5,808.0 $6,757.0 $8,023.0 $8,717.0 $9,556.1 $10,302.4 $11,028.8 $12,016.0 $12,998.7 8.3%

In come Tax (Expense)/ Be nefit ($ 2,0 85.8) ($2,36 5. 3) ($2,71 4.4 ) ($ 2,9 25 .8) ($3 ,24 9.1) ($3, 70 8.9 ) ($ 3,9 70.4) ($4 ,32 5. 7) ($4, 67 9.5 ) 9.8%Minority Interest $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0Net Income (Loss) b/f Extraordinary Ite $3,722.2 $4,391.7 $5,308.6 $5,791.2 $6,307.0 $6,593.5 $7,058.4 $7,690.2 $8,319.1 7.5%

Restructuring Charges/Extr. Items/Disc O ($144.6) ($17.4) ($50.6) $0.0 $0.0 $0.0 $0.0 $0.0 $0.0Cumulative Effect of Accounting Changes $0.0 $5.7 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Net Income (Loss) a/f Extraordinary Ite $3,577.6 $4,314.0 $5,258.0 $5,791.2 $6,307.0 $6,593.5 $7,058.4 $7,690.2 $8,319.1 7.5%Ne t income attributable to no ncon trol ling i ($3 02 .0) ($3 50. 0) ($45 1.0 ) ($4 73 .6) ($4 97. 2) ($ 52 2.1 ) ($548 .2) ($575. 6) ($60 4.4 )

Net income attributable to DIS sharehol $3,275.6 $3,964.0 $4,807.0 $5,317.6 $5,809.8 $6,071.4 $6,510.2 $7,114.6 $7,714.8Diluted Shares Outstanding 1,875.0 1,948.0 1,909.0 1,784.0 1,687.9 1,582.6 1,486.8 1,399.7 1,320.6 -5.8%

Diluted EPS b/f Extr. Items $1.82 $2.07 $2.54 $2.98 $3.44 $3.84 $4.38 $5.08 $5.84 14.4%


Companies Mentioned (Price as of 07 Feb 12)Comcast (CMCSA, $27.09, NEUTRAL, TP $28.00)Discovery Communications Inc. (DISCA, $45.29, NEUTRAL, TP $45.00)News Corporation (NWSA, $19.50, NEUTRAL, TP $18.00)Time Warner, Inc (TWX, $38.10, OUTPERFORM, TP $40.00)

Viacom (VIAB, $48.80, NEUTRAL, TP $51.00)Walt Disney Company (DIS, $40.98, OUTPERFORM, TP $45.00)

Disclosure AppendixImportant Global Disclosures

I, Spencer Wang, certify that (1) the views expressed in this report accurately reflect my personal views about all of the subject companies andsecurities and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed inthis report.

See the Companies Mentioned section for full company names.


12/15

07 February 2012


3-Year Price, Target Price and Rating Change History Chart for DIS

DIS Closing

Price

Target

Price Initiation/

Date (US$) (US$) Rating Assumption

3/3/09 16.36 21

5/6/09 25.87 28

11/13/09 30.44 31

1/11/10 31.36 36

3/22/10 33.94 388/11/10 34.22 41

9/16/10 34.17 39

2/9/11 43.36 48

8/10/11 31.54 43

10/13/11 33.55 40

21

28

31

3638

4139

48

43

40

15

20

25

30

35

40

45

2/7/09

4/7/09

6/7/09

8/7/09

10/7/09

12/7/09

2/7/10

4/7/10

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O=Outperform; N =Neutral; U=Un derperform; R=Restricted; NR=Not Rated; NC=Not C overed

The analyst(s) responsible for preparing this research report received compensation that is based upon various factors including Credit Suisse's totalrevenues, a portion of which are generated by Credit Suisse's investment banking activities.Analysts stock ratings are defined as follows:Outperform (O): The stocks total return is expected to outperform the relevant benchmark* by at least 10-15% (or more, depending on perceivedrisk) over the next 12 months.

Neutral (N): The stocks total return is expected to be in line with the relevant benchmark* (range of 10-15%) over the next 12 months.Underperform (U): The stocks total return is expected to underperform the relevant benchmark* by 10-15% or more over the next 12 months.*Relevant benchmark by region: As of 29th May 2009, Australia, New Zealand, U.S. and Canadian ratings are based on (1) a stocks absolute totalreturn potential to its current share price and (2) the relative attractiveness of a stocks total return potential within an analysts coverage universe**,with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities.Some U.S. and Canadian ratings may fall outside the absolute total return ranges defined above, depending on market conditions and industryfactors. For Latin American, Japanese, and non-Japan Asia stocks, ratings are based on a stocks total return relative to the average total return ofthe relevant country or regional benchmark; for European stocks, ratings are based on a stocks total return relative to the analyst's coverageuniverse**. For Australian and New Zealand stocks, 12-month rolling yield is incorporated in the absolute total return calculation and a 15% and a7.5% threshold replace the 10-15% level in the Outperform and Underperform stock rating definitions, respectively. The 15% and 7.5% thresholdsreplace the +10-15% and -10-15% levels in the Neutral stock rating definition, respectively.**An analyst's coverage universe consists of all companies covered by the analyst within the relevant sector.Restricted (R): In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications,including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other

circumstances.Volatility Indicator [V]: A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24months or the analyst expects significant volatility going forward.

Analysts coverage universe weightings are distinct from analysts stock ratings and are based on the expectedperformance of an analysts coverage universe* versus the relevant broad market benchmark**:Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months.Market Weight: Industry expected to perform in-line with the relevant broad market benchmark over the next 12 months.Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months.*An analysts coverage universe consists of all companies covered by the analyst within the relevant sector.**The broad market benchmark is based on the expected return of the local market index (e.g., the S&P 500 in the U.S.) over the next 12 months.

Credit Suisses distribution of stock ratings (and banking clients) is:Global Ratings Distribution

Outperform/Buy* 46% (60% banking clients)Neutral/Hold* 42% (56% banking clients)Underperform/Sell* 10% (50% banking clients)Restricted 2%

*For purposes of the NYSE and NASD ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, and Underperform most closely correspond to Buy,Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative basis. (Please refer to definitions above.) An investor'sdecision to buy or sell a security should be based on investment objectives, current holdings, and other individual factors.

Credit Suisses policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or themarket that may have a material impact on the research views or opinions stated herein.

Credit Suisse's policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer to CreditSuisse's Policies for Managing Conflicts of Interest in connection with Investment Research:http://www.csfb.com/research-and-analytics/disclaimer/managing_conflicts_disclaimer.html


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Credit Suisse does not provide any tax advice. Any statement herein regarding any US federal tax is not intended or written to be used, and cannotbe used, by any taxpayer for the purposes of avoiding any penalties.

See the Companies Mentioned section for full company names.Price Target: (12 months) for (DIS)Method: We used the discounted cash flow method (DCF) to calculate our $45 target price for DIS. Our 5-year discounted cash flow analysis uses a1.5% terminal growth rate and a market-implied WACC, or weighted avearge cost of capital, (derived by discounting our unlevered FCF, or free cashflow, estimates from 2012 through 2017 to arrive at the stock's current trading price). We then applied this WACC on our 2012-2017 unlevered freecash flow estimates for DIS.Risks: Risks to DIS's achievement of our $45 target price are (1) economic risk given that Disney has material exposure to consumer pending via itsParks & Resorts division, which is inherently discretionary and hence susceptible to fluctuations in the overall economy; (2) Disney has significantexposure to content, the success of which is dependent on consumers' entertainment tastes, which are fickle and unpredictable; (3) if ABC networkenters a prolonged or more severe ratings slump than we currently expect, our current earnings forecast could prove optimistic given high fixedprogramming cost; and (4) capital expenditures at the theme parks & resorts segment is rising.

Please refer to the firm's disclosure website at www.credit-suisse.com/researchdisclosures for the definitions of abbreviations typically used in thetarget price method and risk sections.

See the Companies Mentioned section for full company names.The subject company (DIS) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse.Credit Suisse provided investment banking services to the subject company (DIS) within the past 12 months.Credit Suisse provided non-investment banking services, which may include Sales and Trading services, to the subject company (DIS) within thepast 12 months.Credit Suisse has managed or co-managed a public offering of securities for the subject company (DIS) within the past 12 months.

Credit Suisse has received investment banking related compensation from the subject company (DIS) within the past 12 months.Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (DIS) within the next 3months.Credit Suisse has received compensation for products and services other than investment banking services from the subject company (DIS) withinthe past 12 months.As of the date of this report, Credit Suisse Securities (USA) LLC makes a market in the securities of the subject company (DIS).

Important Regional Disclosures

Singapore recipients should contact a Singapore financial adviser for any matters arising from this research report.

The analyst(s) involved in the preparation of this report have not visited the material operations of the subject company (DIS) within the past 12months.

Restrictions on certain Canadian securities are indicated by the following abbreviations: NVS--Non-Voting shares; RVS--Restricted Voting Shares;SVS--Subordinate Voting Shares.Individuals receiving this report from a Canadian investment dealer that is not affiliated with Credit Suisse should be advised that this report may not

contain regulatory disclosures the non-affiliated Canadian investment dealer would be required to make if this were its own report.For Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visithttp://www.csfb.com/legal_terms/canada_research_policy.shtml.

As of the date of this report, Credit Suisse acts as a market maker or liquidity provider in the equities securities that are the subject of this report.

Principal is not guaranteed in the case of equities because equity prices are variable.

Commission is the commission rate or the amount agreed with a customer when setting up an account or at anytime after that.

CS may have issued a Trade Alert regarding this security. Trade Alerts are short term trading opportunities identified by an analyst on the basis ofmarket events and catalysts, while stock ratings reflect an analyst's investment recommendations based on expected total return over a 12-monthperiod relative to the relevant coverage universe. Because Trade Alerts and stock ratings reflect different assumptions and analytical methods, TradeAlerts may differ directionally from the analyst's stock rating.The author(s) of this report maintains a CS Model Portfolio that he/she regularly adjusts. The security or securities discussed in this report may be acomponent of the CS Model Portfolio and subject to such adjustments (which, given the composition of the CS Model Portfolio as a whole, may differfrom the recommendation in this report, as well as opportunities or strategies identified in Trading Alerts concerning the same security). The CS

Model Portfolio and important d isclosures about it are available at www.credit-suisse.com/ti.Taiwanese Disclosures: Reports written by Taiwan-based analysts on non-Taiwan listed companies are not considered recommendations to buy orsell securities under Taiwan Stock Exchange Operational Regulations Governing Securities Firms Recommending Trades in Securities toCustomers.

To the extent this is a report authored in whole or in part by a non-U.S. analyst and is made available in the U.S., the following are importantdisclosures regarding any non-U.S. analyst contributors:The non-U.S. research analysts listed below (if any) are not registered/qualified as research analysts with FINRA. The non-U.S. research analystslisted below may not be associated persons of CSSU and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions oncommunications with a subject company, public appearances and trading securities held by a research analyst account.For Credit Suisse disclosure information on other companies mentioned in this report, please visit the website at www.credit-suisse.com/researchdisclosures or call +1 (877) 291-2683.


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Americas/United States

Equity Research

This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdictionwhere such distribution, publication, availability or use would be contrary to law or regulation or which would subject Credit Suisse AG, the Swiss bank, or its subsidiaries or its affiliates(CS) to any registration or licensing requirement within such jurisdiction. All material presented in this report, unless specifically indicated otherwise, is under copyright to CS. None ofthe material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of CS. Alltrademarks, service marks and logos used in this report are trademarks or service marks or registered trademarks or service marks of CS or its affiliates.The information, tools and material presented in this report are provided to you for information purposes only and are not to be used or considered as an offer or the solicitation of an

offer to sell or to buy or subscribe for securities or other financial instruments. CS may not have taken any steps to ensure that the securities referred to in this report are suitable forany particular investor. CS will not treat recipients as its customers by virtue of their receiving the report. The investments or services contained or referred to in this report may not besuitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about such investments or investment services. Nothing in this reportconstitutes investment, legal, accounting or tax advice or a representation that any investment or strategy is suitable or appropriate to your individual circumstances or otherwiseconstitutes a personal recommendation to you. CS does not offer advice on the tax consequences of investment and you are advised to contact an independent tax adviser. Pleasenote in particular that the bases and levels of taxation may change.CS believes the information and opinions in the Disclosure Appendix of this report are accurate and complete. Information and opinions presented in the other sections of the reportwere obtained or derived from sources CS believes are reliable, but CS makes no representations as to their accuracy or completeness. Additional information is available uponrequest. CS accepts no liability for loss arising from the use of the material presented in this report, except that this exclusion of liability does not apply to the extent that liability arisesunder specific statutes or regulations applicable to CS. This report is not to be relied upon in substitution for the exercise of independent judgment. CS may have issued, and may inthe future issue, a trading call regarding this security. Trading calls are short term trading opportunities based on market events and catalysts, while stock ratings reflect investmentrecommendations based on expected total return over a 12-month period as defined in the disclosure section. Because trading calls and stock ratings reflect different assumptions andanalytical methods, trading calls may differ directionally from the stock rating. In addition, CS may have issued, and may in the future issue, other reports that are inconsistent with, andreach different conclusions from, the information presented in this report. Those reports reflect the different assumptions, views and analytical methods of the analysts who preparedthem and CS is under no obligation to ensure that such other reports are brought to the attention of any recipient of this report. CS is involved in many businesses that relate tocompanies mentioned in this report. These businesses include specialized trading, risk arbitrage, market making, and other proprietary trading.Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future

performance. Information, opinions and estimates contained in this report reflect a judgement at its original date of publication by CS and are subject to change without notice. Theprice, value of and income from any of the securities or financial instruments mentioned in this report can fall as well as rise. The value of securities and financial instruments is subjectto exchange rate fluctuation that may have a positive or adverse effect on the price or income of such securities or financial instruments. Investors in securities such as ADRs, thevalues of which are influenced by currency volatility, effectively assume this risk.Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding andassuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot andforward interest and exchange rates), time to maturity, market conditions and volatility, and the credit quality of any issuer or reference issuer. Any investor interested in purchasing astructured product should conduct their own investigation and analysis of the product and consult with their own professional advisers as to the risks involved in making such a purchase.Some investments discussed in this report have a high level of volatility. High volatility investments may experience sudden and large falls in their value causing losses when thatinvestment is realised. Those losses may equal your original investment. Indeed, in the case of some investments the potential losses may exceed the amount of initial investment, insuch circumstances you may be required to pay more money to support those losses. Income yields from investments may fluctuate and, in consequence, initial capital paid to makethe investment may be used as part of that income yield. Some investments may not be readily realisable and it may be difficult to sell or realise those investments, similarly it mayprove difficult for you to obtain reliable information about the value, or risks, to which such an investment is exposed.This report may provide the addresses of, or contain hyperlinks to, websites. Except to the extent to which the report refers to website material of CS, CS has not reviewed the linkedsite and takes no responsibility for the content contained therein. Such address or hyperlink (including addresses or hyperlinks to CSs own website material) is provided solely for yourconvenience and information and the content of the linked site does not in any way form part of this document. Accessing such website or following such link through this report orCSs website shall be at your own risk.This report is issued and distributed in Europe (except Switzerland) by Credit Suisse Securities (Europe) Limited, One Cabot Square, London E14 4QJ, England, which is regulated in

the United Kingdom by The Financial Services Authority (FSA). This report is being distributed in Germany by Credit Suisse Securities (Europe) Limited Niederlassung Frankfurt amMain regulated by the Bundesanstalt fuer Finanzdienstleistungsaufsicht ("BaFin"). This report is being distributed in the United States by Credit Suisse Securities (USA) LLC ; inSwitzerland by Credit Suisse AG; in Canada by Credit Suisse Securities (Canada), Inc.; in Brazil by Banco de Investimentos Credit Suisse (Brasil) S.A. or its affiliates; in Mexico byBanco Credit Suisse (Mxico), S.A. (transactions related to the securities mentioned in this report will only be effected in compliance with applicable regulation); in Japan by CreditSuisse Securities (Japan) Limited, Financial Instrument Firm, Director-General of Kanto Local Finance Bureau (Kinsho) No. 66, a member of Japan Securities Dealers Association,The Financial Futures Association of Japan, Japan Securities Investment Advisers Association, Type II Financial Instruments Firms Association; elsewhere in Asia/Pacific bywhichever of the following is the appropriately authorised entity in the relevant jurisdiction: Credit Suisse (Hong Kong) Limited, Credit Suisse Equities (Australia) Limited , Credit SuisseSecurities (Thailand) Limited, Credit Suisse Securities (Malaysia) Sdn Bhd, Credit Suisse AG, Singapore Branch, Credit Suisse Securities (India) Private Limited regulated by theSecurities and Exchange Board of India (registration Nos. INB230970637; INF230970637; INB010970631; INF010970631), having registered address at 9th Floor, CeejayHouse,Dr.A.B. Road, Worli, Mumbai - 18, India, T- +91-22 6777 3777, Credit Suisse Securities (Europe) Limited, Seoul Branch, Credit Suisse AG, Taipei Securities Branch, PT CreditSuisse Securities Indonesia, Credit Suisse Securities (Philippines ) Inc., and elsewhere in the world by the relevant authorised affiliate of the above. Research on Taiwanese securitiesproduced by Credit Suisse AG, Taipei Securities Branch has been prepared by a registered Senior Business Person. Research provided to residents of Malaysia is authorised by theHead of Research for Credit Suisse Securities (Malaysia) Sdn. Bhd., to whom they should direct any queries on +603 2723 2020.In jurisdictions where CS is not already registered or licensed to trade in securities, transactions will only be effected in accordance with applicable securities legislation, which will varyfrom jurisdiction to jurisdiction and may require that the trade be made in accordance with applicable exemptions from registration or licensing requirements. Non-U.S. customerswishing to effect a transaction should contact a CS entity in their local jurisdiction unless governing law permits otherwise. U.S. customers wishing to effect a transaction should do soonly by contacting a representative at Credit Suisse Securities (USA) LLC in the U.S.Please note that this report was originally prepared and issued by CS for distribution to their market professional and institutional investor customers. Recipients who are not market

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