Disney first entered into a feature film agreement with Pixar in 1991, resulting in the release of TOY STORY, which was hailed as an instant classic upon its release in November 1995. In 1997, Disney extended its relationship with Pixar by entering into a co-production agreement, under which Pixar agreed to produce on an exclusive basis five original computer-animated feature films for distribution by Disney. Pixar is currently in production on the final film under that agreement, CARS, directed by Lasseter, to be distributed by Disney on June 9.

The boards of directors of Disney and Pixar have approved the transaction, which is subject to clearance under the Hart-Scott-Rodino Antritrust Improvements Act, certain non-U.S. merger control regulations, and other customary closing conditions. The agreement will require the approval of Pixar's shareholders. Jobs, who owns approximately 50.6% of the outstanding Pixar shares, has agreed to vote a number of shares equal to 40% of the outstanding shares in favor of the transaction.

The Disney board was advised by Goldman, Sachs & Co. and Bear, Stearns & Co. The Pixar board was advised by Credit Suisse.

Separately, the Disney board approved the repurchase of approximately 225 million additional shares, bringing the company's total available authorization to 400 million shares. Since August 2004 through the end of December 2005, Disney has invested nearly $4 billion to purchase nearly 155 million shares. Disney anticipates further significant share repurchases going forward, reflecting Disney's continued commitment to returning value to shareholders over time.

The Walt Disney Co. together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with four business segments: media networks, parks and resorts, studio entertainment and consumer products. Disney is a Dow 30 company, had annual revenues of nearly $32 billion in its most recent fiscal year, and a market capitalization of approximately $50 billion as of January 23, 2006.

Pixar Animation Studios (www.pixar.com) combines creative and technical artistry to create original stories in the medium of computer animation. Pixar has created six of the most successful and beloved animated films of all time: TOY STORY, A BUG’S LIFE, TOY STORY 2, MONSTERS, INC., FINDING NEMO and THE INCREDIBLES. Pixar has won 18 Academy Awards and its six films have grossed more than $3.2 billion at the worldwide box office to date.