Credit Suisse - Anaylst Report

07 February 2012 Americas/United States Equity Research Entertainment

Walt Disney Company (DIS) OUTPERFORM* Rating Price (07 Feb 12, US$) 40.98 Target price (US$) (from 40.00) 45.00¹ 52-week price range 44.07 - 29.00 Market cap. (US$ m) 73,344.66 Enterprise value (US$ m) 85,711.21 *Stock ratings are relative to the relevant country benchmark. ¹Target price is for 12 months.

Research Analysts Spencer Wang 212 325 9624 [email protected] Michael Senno 212 325 1353 [email protected]

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

44 39 34 29 F eb -11

Ma y-1 1

A ug-11

P rice

Nov -11

In dexed S&P 50 0 I NDE X

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

Quarterly EPS 2011A 2012E 2013E

Q1 0.68 0.80 —

Q2 0.49 0.55 —

Q3 0.78 0.97 —

Q4 0.59 0.65 —

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 Disney’s 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 Riddle for 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 as strategically well-positioned. While the stock’s 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 $45. Financial and valuation metrics Year EPS (CS adj.) (US$) Prev. EPS (US$) P/E (x) P/E rel. (%) Revenue (US$ m) EBITDA (US$ m) OCFPS (US$) P/OCF (x) EV/EBITDA (current) Net debt (US$ m) ROIC (%) Number Number of shares shares (m) BV/s BV/sha hare re (Nex (Nextt Qtr. Qtr.,, US$) S$) Net Net debt debt (Nex (Nextt Qtr. Qtr.,, US$ US$ m) Net debt/tot cap (Next Qtr., %)

09/11A 2.54 — 16.1 102.7 40,893.0 10,336.7 3.66 8.2 7.1 10,792 12.23 1,789. 1,789.77 77 — — 29.9

09/12E 09/13E 2.98 3.44 2.96 3.46 13.7 11.9 101.0 95 9 5.6 43,482.1 45,850.4 11,195.3 12,163.7 4.09 4.95 10.0 8.3 6.6 6. 6.0 12,367 11,920 12.81 13.28 IC (curre (current, nt, US$ m) EV/I EV/IC C (x) (x) Divi Divide dend nd (Nex (Nextt Qtr. Qtr.,, US$) US$) Dividend yield (%)

09/14E 3.84 3.92 10.7 96.2 48,277.1 12,997.1 5.54 7.4 5.6 11,182 13.46 49,381 49,381.68 .68 — — —

Source: Company data, Credit Suisse estimates.

DISCLOSURE APPENDIX CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, INFORMATION ON TRADE 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 be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

07 February 2012

Margins Exceed Expectations; FY1Q12 Review Overview 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 the ongoing 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 Change

Attendance Change in Next Qtr. - Forward Bookings = Difference

FY4Q09 4% -5% 9%

FY1Q10 -4% -10% 6%

FY2Q10 -3% -10% 7%

FY3Q10 -6% -9% 3%

Earnings Call FY4Q10 FY1Q11 2% 0% 5% 3% -3% -3%

FY2Q11 2% -2.5% 5%

FY3Q11 1% -2.0% 3%

FY4Q11 3% 0.0% 3%

FY1Q12 ? 5.0% ?

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, Disney’s 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.

Walt Disney Company (DIS)

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07 February 2012

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

Cable Networks Reported Revenue + Affiliate Deferral = Adjusted Revenue

FY1Q11 $3,068 $266 $3,334

FY 1Q12 $3,309 $190 $3,499

Reported EBIT + Affiliate Deferral = Adjusted EBIT Adjusted EBIT Margin Reported EBIT Margin

$771 $266 $1,037 31.1% 25.1%

$967 $190 $1,157 33.1% 29.2%

Y/Y % Growth 7.9% 4.9%

25.4% 11.6%

Source: Company data, Credit Suisse estimates

Advertising Holding Up Like past quarters, Disney provided some color on ad trends. For broadcast network advertising, ABC’s 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. ESPN’s ad sales for the December quarter was flat year over year on a reported basis, but improved 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&O’s are pacing down single digits year over year in the March quarter. Exhibit 3: Disney Advertising Data Points

ABC Scatter vs. Upfront Pricing ESPN TV Station Advertising

FY1Q11 IntraQtr. Pacings Actual 22% 24% 10%+ 34% 10%+ 20%

FY2Q11 IntraQtr. Pacings Actual 30% 41% 10%+ 43% 10%+ 6%

FY3Q11 IntraQtr. P acings Act ual +35% >+25% +Single Digits (1)% +Single Digits (8)%

FY4Q11 IntraQtr. Pacings Actual >+25% 25% Up 4% (5)% (11)%

FY1Q12 IntraQtr. Pacings Actual 25% ? Up Flat 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). In FY1Q12, 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 Disney’s 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 Created Equal , we believe that Disney’s 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 gr owth 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 Disney’s 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 EBITA Cable Networks + Broadcasting = Media Networks + Parks & Resorts + Studio Entertainment + Consumer Products + Interactive Media = Total EBITA

2011

Old

Y/Y % Change

New

Y/Y % Change

$5,233.0 $913.0 $6,146.0 $1,553.0 $618.0 $816.0 ($308.0) $8,825.0

$5,628.6 $905.1 $6,533.7 $1,833.2 $624.2 $899.5 ($256.0) $9,634.6

7.6% -0.9% 6.3% 18.0% 1.0% 10.2% -16.9% 9.2%

$5,628.6 $884.6 $6,513.1 $1,833.2 $624.2 $899.5 ($256.5) $9,613.5

7.6% -3.1% 6.0% 18.0% 1.0% 10.2% NM 8.9%

Operating Margins EBITA Margin Cable Networks Broadcasting Media Networks Theme Parks & Resorts Studio Entertainment Consumer Products Interactive Media Total EBITA Margin

40.6% 15.6% 32.8% 13.2% 9.7% 26.8% -31.4% 21.6%

40.9% 15.2% 33.2% 13.9% 9.7% 28.4% -24.5% 22.1%

$40,893.0 $8,825.0 $0.0 $8,825.0 ($459.0) $0.0 ($343.0) $8,023.0 ($2,714.4) $0.0 $5,308.6 ($50.6) $0.0 $5,258.0 ($451.0) $4,807.0

$43,553.6 $9,634.6 $0.0 $9,634.6 ($482.0) $0.0 ($426.0) $8,726.6 ($3,054.3) $0.0 $5,672.3 $0.0 $0.0 $5,672.3 ($473.6) $5,198.8

Diluted Shares Outstanding

1,909.0

1,754.9

Diluted EPS b/f Extr. Items Diluted EPS a/f Extr. Items

$2.54 $2.52

$2.96 $2.96

Revenues EBITA Amortization Expense Total Operating Income Corporate (Expense) Equity Income of Investees Net Interest (Expense) Income b/f Taxes & Minority Interest Income Tax (Expense)/Benefit Minority Interest Net Income (Loss) b/f Extraordinary Items Restructuring Charges/Extr. Items/Disc Ops (A Cumulative Effect of Accounting Changes Net Income (Loss) a/f Extraordinary Items Net income attributable to noncontrolling intere Net income attributable to DIS shareholders

40.9% 15.0% 33.1% 13.9% 9.7% 28.4% -25.3% 22.1% 6.5% 9.2% 9.2% 5.0% 24.2% 8.8%

16.4%

$43,482.1 $9,613.5 $0.0 $9,613.5 ($471.4) $0.0 ($425.2) $8,717.0 ($2,925.8) $0.0 $5,791.2 $0.0 $0.0 $5,791.2 ($473.6) $5,317.6

Variance ($) Variance (%) $0.0 ($20.5) ($20.5) $0.0 $0.0 $0.0 ($0.5) ($21.0)

0.0% -2.3% -0.3% 0.0% 0.0% 0.0% -0.2%

0.0% -0.2% 0.0% 0.0% 0.0% 0.0% -0.8% 0.0% 6.3% 8.9% 8.9% 2.7% 24.0% 8.7%

1,784.0

-6.5%

$2.98 $2.98

17.1%

($71.5) ($21.0) $0.0 ($21.0) $10.6 $0.0 $0.8 ($9.6) $128.5 $0.0 $118.9 $0.0 $0.0 $118.9 $0.0 $118.9 29.1 $0.02

-0.2% -0.2% -0.2% -2.2% -0.2% -0.1% -4.2% 2.1%

2.1% 2.3% 1.7% 0.6% 0.0%


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 Show outweighed higher marketing costs for new primetime shows. Nonetheless, given the revenue shortfall, EBITA margins contracted ~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 Disney’s 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 Muppets was the only 100% owned new film released in FY1Q12 compared to Tangled and Tron Legacy last 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 Sl ate, FY1Q12 vs. FY1Q11 F 1Q12 T hea tric al Mov ies R ele as es Titl e

Release Date

Re al Stee l (Dreamworks) The M up pets Beauty a nd the Bea st (re-release) War Horse (Drea mworks)

10/7/ 2011 11/23 /20 11 12/25/20 11

F1Q12 Home Video Releases Titl e The L ion King (re-release ) Pira tes o f the Caribb ean 4 Winnie the pooh Ca pta in America: th e Fir st Aveng er Ca rs 2: Wo rld Grand Pirx

Release Date 1 0/4/2011 10 /18/2011 10 /25/2011 10 /25/2011 1 1/1/2011

F 1Q 11 Th eatr ical M ovies Rel ea ses Title 277 Se cretariat 84 Tang le d Tron Legacy 45

F1Q11 Home Vid eo Rele ases 6.8 Title Iron Man 2 0.9 Prince of Persia: Sand of Time Toy Story 3 1.4 The Last So ng 4.5 A Christ mas Caro l Se arch for San ta Pa ws (direct t o DVD) The So rce rers App rentice

Release Date 1 0/8 /2010 11/1 2/201 0 1 2/1 7/201 0

Release Date 9 /28 /2010 9/14/2010 11/2 /2010 8 /17 /2010 1 1/1 6/201 0 11/2 3/201 0 1 1/3 0/201 0

60 591 172

5 9.3 2.1 1.2 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 2 was 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

Stock Price x Shares Outstanding = Equity Market Cap

FY12E $40.98 1,784 $73,110.1

DIS FY13E $40.98 1,688 $69,170.4

FY12E $38.10 964 $36,7 18.1

TWX FY13E $38.10 891 $33,931.6

VIAB FY12E FY13E $48.80 $48.80 537 478 $26,183.8 $23,343.6

NWSA FY12E FY13E $19.71 $19.71 2,470 2,173 $48,676.5 $42,822.1

DISCA FY12E FY13E $43.10 $43.10 388 376 $16,732.1 $16,1 89.8

CMCSA FY12E FY13E $27.09 $27.09 2,618 2,454 $74,457.5 $74,457.5

+ Net Debt + Preferred Stock + Other Adjustments = Adjusted Enterprise Value - Off Balance Sheet Assets

12,366.6 0.0 0.0 85,476.7 (5,778.3)

11,919.9 0.0 0.0 81,090.4 (5,778.3)

17,001.1 0.0 0.0 53,719.2 (1,692.3)

19,216.8 0.0 0.0 53,148.4 (1,692.3)

7,378.5 0.0 0.0 33,562.3 (362.3)

8,741.5 0.0 0.0 32,085.1 (362.3)

6,317.3 0.0 0.0 54,993.8 (11,337.5)

9,351.1 0.0 0.0 52,173.1 (11,337.5)

3,540.3 0.0 0.0 20,272.4 (803.6)

3,148.1 0.0 0.0 19,337.8 (803.6)

34,721.0 0.0 0.0 109,178.5 (22,878.2)

34,721.0 0.0 0.0 109,178.5 (22,878.2)

+ Minority Interest = Enterprise Value / Fiscal Year EBITDA = EV/EBITDA Multiple

7,369.5 87,067.9 10,103.8 8.6x

7,369.5 82,681.6 10,999.1 7.5x

0.0 52,026.8 7,041.8 7.4x

0.0 51,456.1 7,527.6 6.8x

0.0 33,200.0 4,389.0 7.6x

0.0 31,722.8 4,720.3 6.7x

999.7 44,656.1 6,874.7 6.5x

1,184.9 42,020.6 7,535.0 5.6x

0.0 19,468.8 2,139.5 9.1x

0.0 18,534.2 2,359.4 7.9x

3,448.8 89,749.1 19,733.7 4.5x

3,448.8 89,749.1 20,581.5 4.4x

FY12E $19.71 $1.35 14.6x 24.5% 0.6x

NWSA FY13E $19.71 $1.68 11.7x 24.5% 0.5x

FY12E $43.10 $2.90 14.8x 17.1% 0.9x

DISCA FY13E $43.10 $3.43 12.6x 17.1% 0.7x

Source: Factset, Company data, Credit Suisse estimates

Exhibit 7: Comparative PE Multiples, 2012E-2013E DIS Stock Price / EPS = P/E / 5 Year Growth Rate = PEG

FY12E $40.98 $2.98 13.7x 14.4% 1.0x

TWX FY13E $40.98 $3.44 11.9x 14.4% 0.8x

FY12E $38.10 $3.30 11.6x 13.0% 0.9x

VIAB FY13E $38.10 $3.84 9.9x 13.0% 0.8x

FY12E $48.80 $4.37 11.2x 20.4% 0.5x

FY13E $48.80 $5.17 9.4x 20.4% 0.5x

CMCSA FY12E FY13E $27.09 $27.09 $1.81 $2.27 15.0x 11.9x 16.1% 16.1% 0.9x 0.7x



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07 February 2012

Exhibit 8: Comparative P/FCF Multiples, 2012E-2013E Net Income + D&A + Other Non-Cash Charges + Changes in Working Cap = C/F from Ops - CAPEX - Preferred Dividend = Levered FCF / EBITDA = LFCF/EBITDA Conversion

FY12E $5,791 1,924.5 595.0 (1,008.6) 7,302.1 4,057.1 0.0 3,245.0 10,103.8 32.1%

DIS FY13E $6,307 2,011.0 627.0 (588.2) 8,356.9 2,843.4 0.0 5,513.4 10,999.1 50.1%

FY12E $3,169 969.5 7,211.4 (8,035.7) 3,314.3 717.8 0.0 2,596.5 7,041.8 36.9%

FY13E $3,413 1,018.4 7,392.8 (8,206.6) 3,617.8 761.2 0.0 2,856.6 7,527.6 37.9%

FY12E $2,380 280.9 4,911.5 (5,118.5) 2,454.2 173.2 0.0 2,281.1 4,389.0 52.0%

FY13E $2,513 293.0 4,917.8 (5,360.2) 2,363.4 181.1 0.0 2,182.3 4,720.3 46.2%

FY12E $3,247 1,271.5 159.3 (849.5) 3,828.4 1,214.3 0.0 2,614.0 6,874.7 38.0%

NWSA FY13E $3,652 1,327.1 (48.6) (603.0) 4,327.4 1,242.8 0.0 3,084.7 7,535.0 40.9%

FY12E $1,127 121.1 851.9 (943.3) 1,157.2 54.2 0.0 1,103.0 2,139.5 51.6%

DISCA FY13E $1,289 124.1 880.5 (1,015.0) 1,278.4 57.2 0.0 1,221.2 2,359.4 51.8%

7,632.8 19,733.7 38.7%

8,339.2 20,581.5 40.5%

Levered Free Cash Flow / Shares Outstanding = Free Cash Flow per Share

$3,245.0 1,784.0 $1.82

$5,513.4 1,687.9 $3.27

$2,596.5 963.7 $2.69

$2,856.6 890.6 $3.21

$2,281.1 536.6 $4.25

$2,182.3 478.4 $4.56

$2,614.0 2,470.0 $1.06

$3,084.7 2,172.9 $1.42

$1,103.0 388.2 $2.84

$1,221.2 375.6 $3.25

$7,632.8 2,617.6 $2.92

$8,339.2 2,454.0 $3.40

$40.98 $1.82 22.5x

$40.98 $3.27 12.5x

$38.10 $2.69 14.1x

$38.10 $3.21 11.9x

$48.80 $4.25 11.5x

$48.80 $4.56 10.7x

$19.71 $1.06 18.6x

$19.71 $1.42 13.9x

$43.10 $2.84 15.2x

$43.10 $3.25 13.3x

$27.09 $2.92 9.3x

$27.09 $3.40 8.0x

1 22.5x 4.4%

1 12.5x 8.0%

1 14.1x 7.1%

1 11.9x 8.4%

1 11.5x 8.7%

1 10.7x 9.3%

1 18.6x 5.4%

1 13.9x 7.2%

1 15.2x 6.6%

1 13.3x 7.5%

1 9.3x 10.8%

1 8.0x 12.5%

Stock Price / Free Cash Flow per Share = P/FCF Multiple 1 / P/FCF Multiple = FCF Yield

TWX

VIAB

CMCSA FY12E FY13E



8

07 February 2012

Exhibit 9: Disney Quarterly Segment Revenue and EBITA Breakdown, FY2010-FY2012E 2009

1Q (Dec.) 2010

September Fiscal Year Revenue Cable Networks + Broadcasting = M edia Ne twork s + Parks & Resorts + Studio Entertainment + Consumer Products + Interactive Media = Total Revenue

$2,654.0 $1,521.0 $ 4,1 75 .0 $2,662.0 $1,935.0 $746.0 $221.0 $9,739.0

EBITA Cable Networks + Broadcasting = M edia Ne twork s + Parks & Resorts + Studio Entertainment + Consumer Products + Interactive Media = Tota l EBITA

$544.0 $180.0 $7 24 .0 $375.0 $243.0 $243.0 ($10.0) $ 1,5 75 .0

$771.0 $295.0 $1 ,0 66. 0 $468.0 $375.0 $312.0 ($13.0) $2,2 08. 0

Y/Y % Change Revenues Cable Networks Broadcasting Media Networks Theme Parks & Resorts Studio Entertainment Consumer Products Interactive Media Total Revenues

8.2% 4.8% 7.0% -0.1% -0.5% -3.5% -29.4% 1.5%

EBITA Cable Networks Broadcasting Media Networks Theme Parks & Resorts Studio Entertainment Consumer Products Interactive Media Total EBITA

Operating Margins EBITA Margin Cable Networks Broadcasting Media Networks Theme Parks & Resorts Studio Entertainment Consumer Products Interactive Media Total EBITA Margin

2011

$3,068.0 $3,309.0 $1,577.0 $1,470.0 $4 ,6 45. 0 $4 ,77 9.0 $2,868.0 $3,155.0 $1,932.0 $1,618.0 $922.0 $948.0 $349.0 $279.0 $10,716.0 $10,779.0

2010

2Q (March) 2011

2012E

2010

3Q (June) 2011

2012E

2010

4Q (Sept.) 2011

2012E

$2,412.0 $1,432.0 $3 ,84 4. 0 $2,449.0 $1,536.0 $596.0 $155.0 $8,580.0

$2,826.0 $1,496.0 $4, 32 2.0 $2,630.0 $1,340.0 $626.0 $159.0 $9,077.0

$3,108.6 $1,521.3 $ 4,6 29 .9 $2,809.1 $1,444.9 $650.1 $182.9 $9,716.8

$3,280.0 $1,449.0 $ 4, 729 .0 $2,831.0 $1,639.0 $606.0 $197.0 $10,002.0

$3,516.0 $1,433.0 $ 4,9 49 .0 $3,170.0 $1,620.0 $685.0 $251.0 $10,675.0

$3,727.0 $1,474.1 $5 ,20 1.1 $3,635.3 $1,669.6 $713.5 $288.7 $11,508.2

$3,129.0 $1,285.0 $4 ,41 4.0 $2,819.0 $1,591.0 $730.0 $188.0 $9,742.0

$3,467.0 $1,331.0 $4, 798 .0 $3,129.0 $1,459.0 $816.0 $223.0 $10,425.0

$3,615.9 $1,431.1 $ 5,0 46 .9 $3,620.0 $1,689.1 $859.6 $262.4 $11,478.0

$967.0 $226.0 $ 1,19 3.0 $553.0 $413.0 $313.0 ($28.0) $2,44 4.0

$1,183.0 $123.0 $1 ,30 6. 0 $150.0 $223.0 $133.0 ($55.0) $1 ,757. 0

$1,357.0 $167.0 $ 1, 52 4.0 $145.0 $77.0 $142.0 ($115.0) $1, 773.0

$1,383.3 $181.3 $ 1,5 64 .7 $126.4 $74.9 $152.9 ($77.0) $ 1,841.9

$1,676.0 $209.0 $ 1, 885 .0 $477.0 $123.0 $117.0 ($65.0) $2, 537 .0

$1,844.0 $250.0 $ 2,0 94 .0 $519.0 $49.0 $155.0 ($86.0) $ 2,7 31 .0

$2,065.3 $265.4 $2 ,33 0.6 $618.0 $56.2 $179.9 ($71.8) $3,11 2.9

$1,070.0 $147.0 $1 ,21 7.0 $316.0 $104.0 $184.0 ($104.0) $1,71 7.0

$1,261.0 $201.0 $1, 462 .0 $421.0 $117.0 $207.0 ($94.0) $2, 113 .0

$1,213.0 $211.9 $ 1,4 24 .8 $535.8 $80.1 $253.7 ($79.7) $2,2 14 .7

15.6% 3.7% 11.3% 7.7% -0.2% 23.6% 57.9% 10.0%

7.9% -6.8% 2.9% 10.0% -16.3% 2.8% -20.1% 0.6%

9.4% 1.1% 6.2% 1.7% 7.0% 20.2% 20.2% 6.1%

17.2% 4.5% 12.4% 7.4% -12.8% 5.0% 2.6% 5.8%

10.0% 1.7% 7.1% 6.8% 7.8% 3.9% 15.0% 7.0%

28.0% 3.6% 19.4% 2.9% 30.0% 18.8% 74.3% 16.4%

7.2% -1.1% 4.7% 12.0% -1.2% 13.0% 27.4% 6.7%

6.0% 2.9% 5.1% 14.7% 3.1% 4.2% 15.0% 7.8%

-6.2% -7.5% -6.6% -0.9% 6.4% 13.0% 19.7% -1.3%

10.8% 3.6% 8.7% 11.0% -8.3% 11.8% 18.6% 7.0%

4.3% 7.5% 5.2% 15.7% 15.8% 5.3% 17.7% 10.1%

5.2% 30.4% 10.5% -1.8% 29.9% -8.3% NM 9.1%

41.7% 63.9% 47.2% 24.8% 54.3% 28.4% NM 40.2%

25.4% -23.4% 11.9% 18.2% 10.1% 0.3% NM 10.7%

3.4% -24.1% 0.0% -12.3% 1615.4% 37.1% NM 15.1%

14.7% 35.8% 16.7% -3.3% -65.5% 6.8% NM 0.9%

1.9% 8.6% 2.7% -12.8% -2.7% 7.7% NM 3.9%

50.3% 2.5% 42.9% -8.4% -1125.0% 21.9% NM 37.2%

10.0% 19.6% 11.1% 8.8% -60.2% 32.5% NM 7.6%

12.0% 6.1% 11.3% 19.1% 14.6% 16.1% NM 14.0%

-27.8% NM -18.0% -8.1% -900.0% 21.9% NM -7.3%

17.9% 36.7% 20.1% 33.2% 12.5% 12.5% NM 23.1%

-3.8% 5.4% -2.5% 27.3% -31.5% 22.6% NM 4.8%

20.5% 11.8% 17.3% 14.1% 12.6% 32.6% -4.5% 16.2%

25.1% 18.7% 22.9% 16.3% 19.4% 33.8% -3.7% 20.6%

29.2% 15.4% 25.0% 17.5% 25.5% 33.0% -10.0% 22.7%

49.0% 8.6% 34.0% 6.1% 14.5% 22.3% -35.5% 20.5%

48.0% 11.2% 35.3% 5.5% 5.7% 22.7% -72.3% 19.5%

44.5% 11.9% 33.8% 4.5% 5.2% 23.5% -42.1% 19.0%

51.1% 14.4% 39.9% 16.8% 7.5% 19.3% -33.0% 25.4%

52.4% 17.4% 42.3% 16.4% 3.0% 22.6% -34.3% 25.6%

55.4% 18.0% 44.8% 17.0% 3.4% 25.2% -24.9% 27.0%

34.2% 11.4% 27.6% 11.2% 6.5% 25.2% -55.3% 17.6%

36.4% 15.1% 30.5% 13.5% 8.0% 25.4% -42.2% 20.3%

33.5% 14.8% 28.2% 14.8% 4.7% 29.5% -30.4% 19.3%



9

07 February 2012

Exhibit 10: Disney Annual Segment Revenue and EBITA Breakdown, FY2009-FY2017E September Fiscal Year Revenue Cable Networks + Broadcasting = Media Networks + Parks & Resorts + Studio Entertainment + Consumer Products + Interactive Media = Total Revenue

EBITA Cable Networks + Broadcasting = M edia Network s + Parks & Resorts + Studio Entertainment + Consumer Products + Interactive Media = Total EBITA

2009

2010

2011

2012E

2013E

2014E

2015E

2016E

2017E

CAGR '12-'17

$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% $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% $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% $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% $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% $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% $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% $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%

$4,259.0 $506.0 $ 4,7 65 .0 $1,418.0 $175.0 $609.0 ($295.0) $6,672.0

$4,473.0 $659.0 $5,13 2.0 $1,318.0 $693.0 $677.0 ($234.0) $7,586.0

$5,233.0 $5,628.6 $6,142.1 $6,649.9 $7,075.9 $7,695.1 $8,365.0 8.2% $913.0 $884.6 $898.1 $927.8 $944.3 $960.8 $977.2 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% $1,553.0 $1,833.2 $2,070.5 $2,276.9 $2,475.9 $2,688.1 $2,915.6 9.7% $618.0 $624.2 $599.6 $507.0 $485.9 $510.0 $453.9 -6.2% $816.0 $899.5 $1,014.9 $1,086.8 $1,160.8 $1,230.7 $1,295.4 7.6% ($308.0) ($256.5) ($215.7) ($181.3) ($142.4) ($98.4) ($48.5) -28.3% $8,825.0 $9,613.5 $10,509.5 $11,267.0 $12,000.4 $12,986.4 $13,958.6 7.7%

Revenues Cable Networks Broadcasting Media Networks Theme Parks & Resorts Studio Entertainment Consumer Products Interactive Media Total Revenues

5.1% -2.8% 2.2% -7.3% -16.5% 0.4% -1.0% -4.5%

8.7% 0.6% 5.9% 0.9% 9.2% 10.4% 6.9% 5.3%

12.2% 2.6% 9.0% 9.6% -5.2% 13.9% 29.0% 7.4%

6.9% 1.0% 5.0% 12.1% 1.1% 4.0% 3.1% 6.3%

7.9% 1.4% 5.9% 6.9% 1.0% 4.8% 8.1% 5.4%

7.9% 1.7% 6.1% 5.2% 3.1% 3.8% 8.2% 5.3%

7.9% 1.7% 6.2% 5.3% 3.7% 3.8% 8.2% 5.4%

7.9% 1.7% 6.3% 5.3% 0.2% 3.8% 8.3% 5.0%

7.9% 1.7% 6.3% 5.3% -1.3% 3.8% 8.4% 4.9%

EBITA Cable Networks Broadcasting Media Networks Theme Parks & Resorts Studio Entertainment Consumer Products Interactive Media Total EBITA

2.9% -39.9% -4.3% -25.3% -83.9% -21.7% NM -21.4%

5.0% 30.2% 7.7% -7.1% 296.0% 11.2% NM 13.7%

17.0% 38.5% 19.8% 17.8% -10.8% 20.5% NM 16.3%

7.6% -3.1% 6.0% 18.0% 1.0% 10.2% NM 8.9%

9.1% 1.5% 8.1% 12.9% -3.9% 12.8% NM 9.3%

8.3% 3.3% 7.6% 10.0% -15.4% 7.1% NM 7.2%

6.4% 1.8% 5.8% 8.7% -4.2% 6.8% NM 6.5%

8.8% 1.7% 7.9% 8.6% 5.0% 6.0% NM 8.2%

8.7% 1.7% 7.9% 8.5% -11.0% 5.3% NM 7.5%

40.4% 8.9% 29.4% 13.3% 2.9% 25.1% -41.4% 18.5%

39.0% 11.6% 29.9% 12.2% 10.3% 25.3% -30.7% 19.9%

40.6% 15.6% 32.8% 13.2% 9.7% 26.8% -31.4% 21.6%

40.9% 15.0% 33.1% 13.9% 9.7% 28.4% -25.3% 22.1%

41.4% 15.0% 33.8% 14.7% 9.2% 30.5% -19.7% 22.9%

41.5% 15.3% 34.3% 15.3% 7.6% 31.5% -15.3% 23.3%

41.0% 15.3% 34.2% 15.8% 7.0% 32.4% -11.1% 23.6%

41.3% 15.3% 34.7% 16.3% 7.3% 33.1% -7.1% 24.3%

41.6% 15.3% 35.2% 16.8% 6.6% 33.6% -3.2% 24.9%

Y/Y % Change

Operating Margins

EBITA Margin Cable Networks Broadcasting Media Networks Theme Parks & Resorts Studio Entertainment Consumer Products Interactive Media Total EBITA Margin



10

07 February 2012

Exhibit 11: Disney Quarterly Income Statement, FY2010-FY2012E Revenues EBITA Amortization Expense Total Operating Income Corporate (Expense) Equity Income of Investees Net Interest (Expense) Income b/f Taxes & Minority Interest Income Tax (Expense)/Benefit Minority Interest Net Income (Loss) b/f Extraordinary Ite Restructuring Charges/Extr. Items/Disc O Cumulative Effect of Accounting Changes Net Income (Loss) a/f Extraordinary Ite Net income attributable to noncontrolling i Net income attributable to DIS sharehol Diluted Shares Outstanding Diluted EPS b/f Extr. Items

1Q (Dec.) 2009 2010 2011 $9,739.0 $10,716.0 $10,779.0 $1, 575.0 $2,208. 0 $2,444.0 $0.0 $0.0 $0.0 $1,575.0 $2,208.0 $2,444.0 ($72.0) ($112.0) ($107.0) $0.0 $0.0 $0.0 ($103.0) ($95.0) ($90.0) $1,400.0 $2,001.0 $2,247.0 ($505.6) ($654.0) ($726.0) $0.0 $0.0 $0.0 $894.4 $1,347.0 $1,521.0 ($50.4) ($13.0) $0.0 $0.0 $0.0 $0.0 $844.0 $1,334.0 $1,521.0 $0.0 ($32.0) ($57.0) $844.0 $1,302.0 $1,464.0 1,903.0 1,927.0 1,824.0 $0.47

$0.68

$0.80

2Q (March) 2010 2011 $8,580.0 $9,077.0 $1, 757.0 $1,773.0 $0.0 $0.0 $1,757.0 $1,773.0 ($91.0) ($122.0) $0.0 $0.0 ($130.0) ($83.0) $1,536.0 $1,568.0 ($537.0) ($558.0) $0.0 $0.0 $999.0 $1,010.0 $0.0 $0.0 $0.0 $0.0 $999.0 $1,010.0 ($45.0) ($68.0) $954.0 $942.0 1,973.0 1,934.0 $0.48

2012E $9,716.8 $1,841.9 $0.0 $1,841.9 ($128.1) $0.0 ($106.3) $1,607.5 ($546.6) $0.0 $1,061.0 $0.0 $0.0 $1,061.0 ($71.4) $989.6 1,791.5

$0.49

3Q (June) 2011 2012E $10,675.0 $11,508.2 $ 2,731.0 $3,112.9 $0.0 $0.0 $2,731.0 $3,112.9 ($101.0) ($106.1) $0.0 $0.0 ($89.0) ($88.0) ($106.3) $2,329.0 $2,542.0 $2,900.6 ($829.7) ($860.0) ($986.2) $0.0 $0.0 $0.0 $1,499.3 $1,682.0 $1,914.4 $0.0 ($19.0) $0.0 $5.7 $0.0 $0.0 $1,505.0 $1,663.0 $1,914.4 ($174.0) ($187.0) ($196.4) $1,331.0 $1,476.0 $1,718.0 1,978.0 1,912.0 1,771.0

2010 $10,002.0 $2,537. 0 $0.0 $2,537.0 ($119.0)

$0.55

$0.67

$0.78

4Q (Sept.) 2010 2011 2012E $9,742.0 $10,425.0 $11,478.0 $1,717.0 $2, 113.0 $2,214.7 $0.0 $0.0 $0.0 $1,717.0 $2,113.0 $2,214.7 ($138.0) ($124.0) ($130.2) $0.0 $0.0 ($87.0) ($77.0) ($122.6) $1,492.0 $1,912.0 $1,961.9 ($493.0) ($642.4) ($667.0) $0.0 $0.0 $0.0 $999.0 $1,269.6 $1,294.9 $33.0 ($18.6) $0.0 $0.0 $0.0 $0.0 $966.0 $1,251.0 $1,294.9 ($131.0) ($164.0) ($148.8) $835.0 $1,087.0 $1,146.1 1,941.0 1,864.0 1,750.5

$0.97

$0.45

$0.59

$0.65


Exhibit 12: Disney Annual Income Statement, FY2009-FY2017E

Revenues EBITA Amortization Expense Total Operating Income Corporate (Expense) Equity Income of Investees Net Interest (Expense) Income b/f Taxes & Minority Interest In come Tax (Expense)/ Be nefit Minority Interest Net Income (Loss) b/f Extraordinary Ite Restructuring Charges/Extr. Items/Disc O Cumulative Effect of Accounting Changes Net Income (Loss) a/f Extraordinary Ite Ne t income attributable to no ncon trol ling i Net income attributable to DIS sharehol Diluted Shares Outstanding Diluted EPS b/f Extr. Items

2009 $36,149.0 $6,672.0 $0.0 $6,672.0 ($398.0) $0.0 ($466.0) $5,808.0 ($ 2,0 85.8) $0.0 $3,722.2 ($144.6) $0.0 $3,577.6 ($3 02 .0) $3,275.6 1,875.0

2010 $38,063.0 $7,58 6. 0 $0.0 $7,586.0 ($420.0) $0.0 ($409.0) $6,757.0 ($2,36 5. 3) $0.0 $4,391.7 ($17.4) $5.7 $4,314.0 ($3 50. 0) $3,964.0 1,948.0

$1.82

$2.07

2011 $40,893.0 $8,825.0 $0.0 $8,825.0 ($459.0) $0.0 ($343.0) $8,023.0 ($2,71 4.4 ) $0.0 $5,308.6 ($50.6) $0.0 $5,258.0 ($45 1.0 ) $4,807.0 1,909.0 $2.54

2012E $43,482.1 $ 9,613.5 $0.0 $9,613.5 ($471.4) $0.0 ($425.2) $8,717.0 ($ 2,9 25 .8) $0.0 $5,791.2 $0.0 $0.0 $5,791.2 ($4 73 .6) $5,317.6 1,784.0

2013E 2014E 2015E 2016E 2017E $45,850.4 $48,277.1 $50,902.1 $53,455.6 $56,079.5 $10,509.5 $11,267.0 $12, 000.4 $12,986.4 $13 ,958.6 $0.0 $0.0 $0.0 $0.0 $0.0 $10,509.5 $11,267.0 $12,000.4 $12,986.4 $13,958.6 ($494.9) ($519.7 ) ($545.6) ($572.9) ($601.6) $0.0 $0.0 $0.0 $0.0 $0.0 ($458.6) ($445.0) ($425.9) ($397.5) ($358.3) $9,556.1 $10,302.4 $11,028.8 $12,016.0 $12,998.7 ($3 ,24 9.1) ($3, 70 8.9 ) ($ 3,9 70.4) ($4 ,32 5. 7) ($4, 67 9.5 ) $0.0 $0.0 $0.0 $0.0 $0.0 $6,307.0 $6,593.5 $7,058.4 $7,690.2 $8,319.1 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $6,307.0 $6,593.5 $7,058.4 $7,690.2 $8,319.1 ($4 97. 2) ($ 52 2.1 ) ($548 .2) ($575. 6) ($60 4.4 ) $5,809.8 $6,071.4 $6,510.2 $7,114.6 $7,714.8 1,687.9 1,582.6 1,486.8 1,399.7 1,320.6

$2.98

$3.44

$3.84

$4.38

$5.08

$5.84

CAGR '12-'17 5.2% 7.7% 7.7%

-3.4% 8.3% 9.8% 7.5%

7.5%

-5.8% 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 Appendix Important 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 and securities and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report. See the Companies Mentioned section for full company names.


11

07 February 2012

3-Year Price, Target Price and Rati ng Change History Chart for DIS DIS Date 3/3/09 5/6/09 11/13/09 1/11/10 3/22/10 8/11/10 9/16/10 2/9/11 8/10/11 10/13/11

Closing Price (US$) 16.36 25.87 30.44 31.36 33.94 34.22 34.17 43.36 31.54 33.55

Target Price Initiation/ (US$) Rating Assumption 21 28 31 36 38 41 39 48 43 40

48 45 43

41

40

38

40

39

36

35 31

30 28 25 20 US$

21

15

9 9 0 0 1 1 9 9 9 0 0 0 1 1 9 0 1 1 0 1 1 1 0 0 0 1 1 1 1 0 1 0 1 1 1 1 / / / / / / / / / / / / / / / / / / 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 / / / / / / / / / / / / / / / / / / 0 0 2 0 2 2 2 4 6 8 2 4 6 8 2 4 6 8 1 1 1 1 1 1

Closing Price

Target Price

Initiation/Assumption

Rating

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 total revenues, a portion of which are generated by Credit Suisse's investment banking activities. Analysts’ stock ratings are defined as follows: Outperform (O): The stock’s total return is expected to outperform the relevant benchmark* by at least 10-15% (or more, depending on perceived risk) over the next 12 months. Neutral (N): The stock’s total return is expected to be in line with the relevant benchmark* (range of ±10-15%) over the next 12 months. Underperform (U): The stock’s 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 29 th May 2009, Australia, New Zealand, U.S. and Canadian ratings are based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractiveness of a stock’s total return potential within an analyst’s 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 industry factors. For Latin American, Japanese, and non-Japan Asia stocks, ratings are based on a stock’s total return relative to the average total return of the relevant country or regional benchmark; for European stocks, ratings are based on a stock’s total return relative to the analyst's coverage universe**. For Australian and New Zealand stocks, 12-month rolling yield is incorporated in the absolute total return calculation and a 15% and a 7.5% threshold replace the 10-15% level in the Outperform and Underperform stock rating definitions, respectively. The 15% and 7.5% thresholds replace 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 se ctor. 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 24 months or the analyst expects significant volatility going forward. Analysts’ coverage universe weightings are distinct from analysts’ stock ratings and are based on the expected performance of an analyst’s coverage universe* versus the relevant broad market benchmark**: Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 mon ths. 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 analyst’s 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 50 0 in the U.S.) over the next 12 mon ths. Credit Suisse’s distribution of stock ratings (and banking clients) is: Global Ratings Distribution 46% (60% banking clients) Outperform/Buy* Neutral/Hold* 42% (56% banking clients) 10% (50% banking clients) Underperform/Sell* 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's decision to buy or sell a security should be based on investment objectives, current holdings, and other individual factors.

Credit Suisse’s policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market 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 Credit Suisse'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 cannot be 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 a 1.5% terminal growth rate and a market-implied WACC, or weighted avearge cost of capital, (derived by discounting our unlevered FCF, or free cash flow, estimates from 2012 through 2017 to arrive at the stock's current trading price). We then applied this WACC on our 2012-2017 unlevered free cash 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 its Parks & Resorts division, which is inherently discretionary and hence susceptible to fluctuations in the overall economy; (2) Disney has significant exposure to content, the success of which is dependent on consumers' entertainment tastes, which are fickle and unpredictable; (3) if ABC network enters a prolonged or more severe ratings slump than we currently expect, our current earnings forecast could prove optimistic given high fixed programming 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 the target 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 the past 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 3 months. Credit Suisse has received compensation for products and services other than investment banking services from the subject company (DIS) within the 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 r eport. The analyst(s) involved in the preparation of this report have not visited the material operations of the subject company (DIS) within the past 12 months. 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 visit http://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 of market events and catalysts, while stock ratings reflect an analyst's investment recommendations based on expected total return over a 12-month period relative to the relevant coverage universe. Because Trade Alerts and stock ratings r eflect different assumptions and analytical methods, Trade Alerts 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 a component of the CS Model Portfolio and subject to such adjustments (which, given the composition of the CS Model Portfolio as a whole, may differ from 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 disclosures 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 or sell securities under Taiwan Stock Exchange Operational Regulations Governing Securities Firms Recommending Trades in Securities to Customers. 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 important disclosures 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 analysts listed below may not be associated persons of CSSU and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications 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.creditsuisse.com/researchdisclosures or call +1 (877) 291-2683.


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Disclaimers continue on next page.


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