The Walt Disney Studios enjoyed one of its best years on record, as a slate of extraordinary live-action and animated motion pictures, best-selling DVD releases, chart-topping CDs and theatrical stage productions connected with audiences all over the world. During the year, the Studios announced a comprehensive business strategy that emphasizes a renewed focus on family entertainment featuring the Disney name. Adding to its monumental year, the acquisition of Pixar Animation Studios reinforced the Studios’ commitment to feature animation and creative filmmaking.

Topping the Studios’ list of milestones for 2006 was the record-breaking worldwide phenomenon Pirates of the Caribbean: Dead Man’s Chest, the number one domestic animated film of the year, Disney/Pixar’s Cars and the runaway success of The Chronicles of Narnia: The Lion, The Witch and The Wardrobe. These great Disney titles produced a treasure trove of benefits for virtually every area of the Company.

Walt Disney Pictures’ Pirates of the Caribbean: Dead Man’s Chest, reuniting the powerhouse team of producer Jerry Bruckheimer, director Gore Verbinski and a stellar cast headed by Johnny Depp, sailed into the record books as the third biggest film in motion picture history and became Disney’s biggest film of all time with more than $1 billion in worldwide box office. The swashbuckling sensation opened to a record three-day domestic box office gross of over $135 million and became the top-grossing film of the year in the U.S. and around the world. The film’s success drove Buena Vista International to its unprecedented 12th consecutive year of over $1 billion in overseas box office.

The Pirates success story continued throughout the year with the release of the DVD in December. The title quickly became the year’s top-selling domestic release.

Now that Pirates fever is gripping moviegoers around the world, the scheduled May 25 release of the franchise’s third installment, Pirates of the Caribbean: At World’s End, is already generating enormous excitement and anticipation. With Captain Jack Sparrow exiled to an eternity in Davy Jones’ Locker, Will Turner, Elizabeth Swann and the newly returned Captain Barbossa must struggle against an array of enemies, both human and serpentine, to rescue him.

The Chronicles of Narnia was the third biggest selling DVD of 2006, with sales of more than 12 million units domestically. Andrew Adamson has returned to direct the highly anticipated sequel Prince Caspian, in which more than 1,300 years have passed since the Pevensie children’s last visit to Narnia. Much of the magic has been lost under the leadership of a race of men from Telmar, and now it’s up to Prince Caspian, the rightful heir to the Narnian throne, along with the children and an army of fantastical creatures, to reclaim the kingdom. The adventure resumes in summer 2008.