ParentsOf4
Well-Known Member
Interestingly, MyMagic+ is not a typical P&R project. Based on my examination of Disney's SEC filings, it appears that most of MyMagic+'s costs are opex and SG&A, with opex costs ongoing. Still, plenty was spent on capex and, as you note, these costs are being depreciated over several years.
I do recall Iger or Rasulo warning at one of the earning calls that MyMagic+ is being depreciated much more quickly than traditional P&R projects (which Disney usually depreciates over 25-40 years) because it is IT intensive.
Perhaps more significantly, Disney reported the following for fiscal year 2014:
Selling, general, administrative and other costs decreased $104 million from $1,960 million to $1,856 million due to the absence of development costs for MyMagic+ [emphasis added], partially offset by higher marketing and sales costs and higher pre-opening costs at Shanghai Disney Resort.
Opex and depreciation were both up about 7% in 2014, so a decline of over 5% in SG&A is rather remarkable.
The difference between +7% and -5% is about $240M. I doubt MyMagic+ development costs actually declined by $240M but considering that P&R's operating income was up $443M for the year, the "absence of development costs for MyMagic+" might represent a significant portion of P&R profit gain in 2014.
