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WHEN: Today, Wednesday, May 12th

WHERE: CNBC's Business Day Programming

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Disney President & CEO Bob Iger today, Wednesday, May 12th. Excerpts of the interview will run throughout CNBC's Business Day programming.

All references must be sourced to CNBC.

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Disney's Iger on Earnings, Advertising & More

Disney CEO Bob Iger discusses advertising, the FCC, his company's earnings and more with CNBC's Julia Boorstin.

JULIA BOORSTIN: Bob Iger, thank you so much-- for talking to us after your fiscal second quarter earnings. Why do you think the stock is trading down after your earnings report?

BOB IGER: Well, I haven't seen the stock, sorry, I just got back from my earnings report.

JULIA BOORSTIN: It's okay. I think—

JULIA BOORSTIN: --down about three percent after hours.

JULIA BOORSTIN: Is it-- but--but-- why-- why would the market react that way?

BOB IGER: You know, I don't really track what our stock does after market, partially because the volume of after market trading can be low, and a trade or two can have a significant influence on direction. I think tomorrow will be more telling than aftermarket. I don't have a perspective on how the market reacted to our earnings other than what our perspective is, and that is that we thought we announced a strong quarter, strong results, and signs of economic recovery in a few of our businesses, and certainly a sign of creative recovery at our studio led by Alice in Wonderland.

JULIA BOORSTIN: Now, there's allot of interest in your parks division. Operating income fell 12 percent in this quarter. Do you expect consumer spending and travel to rebound this summer?

BOB IGER: Well, I expect it will be a better summer this summer than it was last summer. Our sense is that people will take vacations this summer. More people will take vacations this summer than took vacations last summer and our pricing, our current pricing at our parks, is less of a discount than a year ago. We actually feel good about the summer in our parks.

JULIA BOORSTIN: The parks are considered a pretty good barometer of consumer spending. You did a lot of discounting. And now you start to ease up on that discounting. What kind of response have you seen to these higher prices now that the discounting is over?

BOB IGER: Well, our parks, while they're a good barometer of what's going on with the consumer and the economy, they tend to lag the economy in times of economic distress or fall-off. They typically lag on the recovery as well because just general booking cycles. People book their vacations well in advance and usually don't cancel if the economy falls apart. And, they usually wait until their certain the economy is strengthening before they book a vacation as the economy strengthens. Our feeling is that we offer a very unique product. We are not a commodity. While there are a lot of different places that people can go to vacation, there is nothing like a Disney theme park experience. And, it's something that in terms of demand, didn't really lag. We never saw a fall-off in demand at all. What we did see was people post-poning their intent to come visit because of what was going on in the economy. So, we feel that if the economy strengthens and people feel generally good about spending on things like vacations, they'll look at the price to value relationship that we offer and we don't have any concerns about our business doing well under those circumstances. Pricing will not be an issue.

JULIA BOORSTIN: What is the pricing strategy going forward coming off this period of discounting?

BOB IGER: Well, we basically, uh, wean the customer gradually on the discount. No two economic downturns are the same. As we look back at prior economic downturns, whether you look at 2001 or go back to early '90s, we were able to successfully wean the customer with a fairly methodical approach. And that's our approach here. So, the strategy is to gradually reduce the size of the discount. By the way, there's always some kind of discount available to our customers, depending on when they book, how long they book, the kind of package their willing to reserve. Discounts don't go away 100%, but the kind of discount we were using at time the economy at its worst, is certainly not one we would expect to continue and in fact we're not doing that. The strategy is really less discounting, but to remove the discount as the marketplace improves, which is what we're seeing.

JULIA BOORSTIN: Something like the market volatility we saw last Thursday, does something that effect turnout at the parks?

BOB IGER: No, not typically. Every once in awhile a great disruption will slow down reservations for a period of a day when people are distracted or waiting to see what's going on. But typically no. Typically when it comes to vacation bookings it takes much more than an afternoon incident to deter people.

JULIA BOORSTIN: Alice in Wonderland. Huge success. Really drove your growth this quarter. You criticized the studio in the past for dragging on the company's results. Is the studio finally on track?

BOB IGER: We're really pleased with Alice in Wonderland. It's our second highest box office ever next to one the installments of Pirates. It’s the 7th highest box office in history of movies. It's a film we feel great about creatively. So, that's great news. We think their pipeline is in really good shape. We're really excited about the summer with Prince of Persia, Toy Story 3, and Sorcerer's Apprentice and Tron later in the Year. And we have a sequel to Cars coming up. So, we think the studio is in great shape and going on track in terms of the movies they're making, how the movies are made, and how the movies are brought to market.

JULIA BOORSTIN: How important is 3-D to Disney's future?

BOB IGER: Well, I think 3-D is important to the movie business. It affords the movie goer the opportunity to enjoy their movie at a higher level. It affords the theater owner to attract more people and charge more per ticket. It affords the movie industry to make better movies when applied right and to the right movies. And also to reap benefits of higher ticket prices. I think there's real growth potential to 3-D. I think it has to be used judiciously. I think it's important we not turn every film into a 3-D film. Not every film commands that. Toy Story 3 is certainly one that's coming up that we believe does command that. We're going to look carefully at the Marvel properties coming up, probably a good example of live action properties that do deserve 3D technology. But we're mindful of the fact that you can't just slap it on and expect the consumer to pay $3+ per ticket premium. And we don't want to kill the goose that lays the golden egg and we hope that the industry doesn't do just that.

JULIA BOORSTIN: And obviously, you have Iron Man 2 this quarter. Do you think the studio is gonna be the division that's going to consistently drive growth over the rest of the year?

BOB IGER: I don't think the studio is the only division that will drive growth. We're looking to drive growth from a number of our divisions including our media networks and consumer products and the internet group of course.

JULIA BOORSTIN: Speaking of media networks, at the broadcast channels, advertising revenues declined. How has the ad market recovered?

BOB IGER: The ad market is recovering. It's not back to the highest levels that we saw, but the scatter marketplace indicates that there's real strength in the market and we've seen that ESPN and at ABC and our broadcast stations. And we feel really good going into the Upfront for our network, ABC, and for our cable networks. And we believe that those are signs that the economy is stronger in the advertising marketplace is substantially healthier than it was a year ago.

JULIA BOORSTIN: Your outlook for advertising. Do you see advertising bouncing back to prior levels over the course of the year?

BOB IGER: It depends on what you're looking at. I think on a national level, cable, it will probably bounce back quicker. Broadcasting could take some time. Local television will take a longer time, to bounce back to the high water mark.

JULIA BOORSTIN: Cable networks are a consistent point of strength for Disney. You have a major renegotiation coming up with Time Warner-- in August. Are you willing to pull channels from the air in order to secure higher rates?

BOB IGER: Well, I think you demonstrated in the negotiation that we had, that we are intent on deriving the value that we believe we deliver to distributors and to consumers and we're always mindful of the disruption that pulling a channel creates and it's certainly no our strategy to do that. Our strategy is to get the proper pricing for the value that we deliver and we are going to be optimists not pessimists to do that.

JULIA BOORSTIN: You mentioned gross in your internet properties. How is the iPad changing your business?

BOB IGER: Well, I think the iPad is an unbelievably compelling platform in a variety of different ways. It's sort of all things to all people. It's a great reader, games platform, great platform to access internet, tremendous for playing video. I think it's the best that I've seen of mobile video -- EVER. And that suggests we have a platform that can provide the consumer with real value because the user interface and quality of the experience is so high, and usually when you have that, you have the ability to monetize and that really excites us.

JULIA BOORSTIN: Well, how soon before digital distribution revenues really move the needle for Disney?

BOB IGER: Well, we're starting to see real growth. And um I'm stunned at some of the rates we've been able to charge for iPad apps for instance. I mentioned on our call we've seen 30% growth in digital sales at ESPN for instance. I think we're still at the beginning of the beginning in terms of digital media and digital video. There's certainly been great growth and I think you're going to see substantially more in terms of consumption because of new platforms like the ipad but also in terms of monetization.

JULIA BOORSTIN: There's been a lot of debate about the FCC's recent proposal to regulate the internet. You distribute content over the internet as you just mentioned -- what is best for Disney?

BOB IGER: Well, best for Disney is a platform that sees robust growth. This is a business that's still relatively nascent. We would hope and urge the government to proceed with caution when they consider or apply regulation to that medium. We certainly are heartened by the fact that their willing in the creation of some form of regulation to recognize that the industry has to have the ability to filter out illegal or pirated content. That's a big step. But we think that the rest of the restrictions or regulations need to keep in mind that this is a relatively new medium and while regulation could be designed to create growth sometimes the best way to create growth is to allow the marketplace create it through normal circumstances, and not manufactured through some legislative or regulatory process.

JULIA BOORSTIN: You bought Marvel for $4.4 billion last summer. You have over $3 billion of cash on your balance sheet. Are you looking at any other acquisitions?

BOB IGER: We were looking for growth at the company and to deliver growth to our shareholders that's done in a variety of ways - organic development, acquisition, shareholder buybacks, dividends. I think we made a big acquisition last year in Marvel, and we're still in the process of integrating and I'm a big believer in proceeding with caution once you've made an acquisition because I think it's important to integrate properly before you begin to integrate another large acquisition for instance. I think you'll see somewhat of a conservative approach near term, but we have the wherewithal to take advantage of opportunities, and if a great opp comes around, we hope to take advantage of that.

JULIA BOORSTIN: Speaking of investment. You continue to invest in a massive capital intensive theme park expansion, cruise ship around the world. When this capacity becomes available, do you think the demand will be there?

BOB IGER: We do. We look at each one of these initiatives from a Return on invested Capital perspective. We're rigorous in that regard. Each one has been very carefully analyzed in that regard. And each one has been carefully analyzed with that in mind. We believe the work going on in California venture, expansion of Hong Kong, addition of 2 cruise ships, expansion of the park in (ah) Florida, creation of the resort in Hawaii, are all designed to improve or deliver strong returns on invested capital.

JULIA BOORSTIN: And do you have a buyer for Miramax?

BOB IGER: (LAUGHS) We have interested parties. And we're in negotiation and we won't say anything more than that.

JULIA BOORSTIN: And the final question, based on your visibility-- your ability to look at all of these different divisions. Where is the American consumer? When do you expect the American consumer to really be back?

BOB IGER: Well, I think the American consumer is in a better place today than the American consumer was before. I think that the govt stepping in an staunching the bleeding when the marketplace was falling apart was generally speaking met very positively among American consumers. I think that the feeling of doom and sense of emergency is largely gone. I think there was also a fair amount of damage done to the American psyche, and that takes some time to recover from. So I think that while circumstances are better -- and you see that with certain metrics -- I think that the recovery is going to be gradual and will not happen all at once. As I said earlier, we've seen in our businesses, some real signs of that, and we believe will continue to see them but it's going to take time to bounce back to unbelievably robust spending levels we saw in the economy before all of this happened.

JULIA BOORSTIN: Great. Bob Iger, thank you so much for talking to us today.

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