News Tron coaster coming to the Magic Kingdom

[Mr. Moderate]

That's not happening til Tron is done.

I figured as much and you're most likely right, but I was hoping for more. I give Universal credit for building that beautifully themed, exciting coaster in IOA, staying on point, and not using the pandemic as a way to halt construction and spread out the costs for future budgets. My two sons are looking forward to riding the VelociCoaster multiple times on our October trip, more than they are going to MK.

 

[Incomudro]

From current progress, I’d be shocked if the canopy (are they installing panels?) is done anytime soon anyway.

I'm guessing (hoping) that the panel installation is one of the quicker processes of the exterior build.

 

[lazyboy97o]

I figured as much and you're most likely right, but I was hoping for more. I give Universal credit for building that beautifully themed, exciting coaster in IOA, staying on point, and not using the pandemic as a way to halt construction and spread out the costs for future budgets. My two sons are looking forward to riding the VelociCoaster multiple times on our October trip, more than they are going to MK.

Does one coaster that had no good way to protect really make up for decimating Universal Creative, delaying not just Epic Universe but other projects that were being developed?

 

[lunchbox1175]

I guess I’m in the minority here by saying that not only do I welcome Tron I would love if the powers that be, would put some great dark rides in Magic Kingdom as I feel it’s lacking. I would love to have two dark rides based on what I’ve seen in the Tokyo Disneyland resort. Monsters Inc. and Pooh’s Hunny hut ride I think would make great additions to MK. Please just get rid of stitches great escape and Monsters, Inc. laugh house floor

aw....come on why the hate for M.I.L.F? I quite enjoy that as a spot to get out of the heat and relax for a few.

 

[EricsBiscuit]

The theory that Disney is “spreading out the costs” is nonsense. Capex is amortized or depreciated. It wouldn’t all show up as an expense in one quarter. If they spend $100 million on a tractor in one quarter. The cost is spread over the life of the tractor. Same for every other capital expenditure. They’re simply incompetent. No other explanation. This thing should have soft opened by now. The Velocicoaster, which I just rode, puts Disney to shame with each dispatch.

 

[marni1971]

The theory that Disney is “spreading out the costs” is nonsense. Capex is amortized or depreciated. It wouldn’t all show up as an expense in one quarter. If they spend $100 million on a tractor in one quarter. The cost is spread over the life of the tractor. Same for every other capital expenditure. They’re simply incompetent. No other explanation. This thing should have soft opened by now. The Velocicoaster, which I just rode, puts Disney to shame with each dispatch.

You make me sound like an optimist!

 

[jt04]

aw....come on why the hate for M.I.L.F? I quite enjoy that as a spot to get out of the heat and relax for a few.

People aren't opposed to the air conditioning, it is the place setting that is the glaring issue.

 

[jt04]

The theory that Disney is “spreading out the costs” is nonsense. Capex is amortized or depreciated. It wouldn’t all show up as an expense in one quarter. If they spend $100 million on a tractor in one quarter. The cost is spread over the life of the tractor. Same for every other capital expenditure. They’re simply incompetent. No other explanation. This thing should have soft opened by now. The Velocicoaster, which I just rode, puts Disney to shame with each dispatch.

Uni doesn't have anything in the near term to respond at the openings of Rat, Guardians, and TRON.
(Mouse playing chess)

Though Epic Universe will in the very long term be a real challenge for twdc. IMO.

 

[MiddKid]

The theory that Disney is “spreading out the costs” is nonsense. Capex is amortized or depreciated. It wouldn’t all show up as an expense in one quarter. If they spend $100 million on a tractor in one quarter. The cost is spread over the life of the tractor. Same for every other capital expenditure. They’re simply incompetent. No other explanation. This thing should have soft opened by now. The Velocicoaster, which I just rode, puts Disney to shame with each dispatch.

Far from nonsense. Two very real financial impacts happening here.

Cash Flow management is first. Cash is King. While the P&L impact is depreciated as you point out, the cash flow is short term...gotta pay for the materials and contractors. Delaying the build delays the impact to the cash flow statement. In a COVID situation where inbound cash is pinched, controlling the outflows matters. In fact, in terms of capital planning, targets are set for the divisions in context of yearly capital outlays...not the subsequent depreciation hit to the P&L.

Secondly, pushing out opening also pushes out the P&L impact of said depreciation along with all other associated pre-opening costs that have been parked in pre-paids awaiting the opening date. If the park is at 30% capacity today, you certainly don't want year one of Tron (and Guardians and Rat and...) depreciation weighing down your P&L.

Since you brought up Velocicoaster, by your theory Universal should be chugging away on Epic Universe construction since it's depreciated. Keep building it! You won't see it hit until 2025! Nope, that's not how cash works. And it's why that construction site is a ghost town.

So incompetence it is not. It's corporate financial management and it's what you need to do when you are managing a company with a $300B+ market cap. We may not always like the in-park impact (and it may not need to go as deep) but it's reality.

 

[JEANYLASER]

I can't hardly wait to ride on Tron:Lightcycle Run at the Magic Kingdom!

 

[Mr. Moderate]

I’d like to think that we all can agree when this pandemic is behind us, the parks are at pre pandemic levels, and improvements are being done, it will be better for everyone who frequents the theme parks. Especially when Epic Adventure is completed and hopefully it will raise the bar and Disney responds. One can dream, right? I have to say I appreciate some of this conversation here on this thread and it was educational. Thank you for the read.

 

[Little Green Men]

The theory that Disney is “spreading out the costs” is nonsense. Capex is amortized or depreciated. It wouldn’t all show up as an expense in one quarter. If they spend $100 million on a tractor in one quarter. The cost is spread over the life of the tractor. Same for every other capital expenditure. They’re simply incompetent. No other explanation. This thing should have soft opened by now. The Velocicoaster, which I just rode, puts Disney to shame with each dispatch.

Maybe but If something like RnRc is hard for me to handle, I doubt I could ever ride Velocicoaster

 

[dreday3]

Maybe but If something like RnRc is hard for me to handle, I doubt I could ever ride Velocicoaster

Yeah. I like coasters, but coasters are kind of all the same to me, so I don't really put one up over the other. Except wooden coasters. I will always take a wooden coaster over any other coaster.

Tron lights up. And I am a huge original Tron fan. So points for that.

 

[Jabbas]

Somewhere in my old age I got terrified of roller coasters. It’s fine once I get off but I have really bad anxiety the entire time I’m in line. Hope I can work up the courage to ride this!

 

[dreday3]

Somewhere in my old age I got terrified of roller coasters. It’s fine once I get off but I have really bad anxiety the entire time I’m in line. Hope I can work up the courage to ride this!

I'm 47. My trick is I always look for people older than me in line and say to myself, if they can do this, I can do this! And I always see quite few older ladies and gents ahead of me in line. And they always seem a lot more relaxed than I am!

 

[gorillaball]

The theory that Disney is “spreading out the costs” is nonsense. Capex is amortized or depreciated. It wouldn’t all show up as an expense in one quarter. If they spend $100 million on a tractor in one quarter. The cost is spread over the life of the tractor. Same for every other capital expenditure. They’re simply incompetent. No other explanation. This thing should have soft opened by now. The Velocicoaster, which I just rode, puts Disney to shame with each dispatch.

I’ve mentioned this enough times I gave up and just laugh now. It’s such a common thought on board it’s practically impossible to combat. Accounting 101

 

[gorillaball]

Far from nonsense. Two very real financial impacts happening here.

Cash Flow management is first. Cash is King. While the P&L impact is depreciated as you point out, the cash flow is short term...gotta pay for the materials and contractors. Delaying the build delays the impact to the cash flow statement. In a COVID situation where inbound cash is pinched, controlling the outflows matters. In fact, in terms of capital planning, targets are set for the divisions in context of yearly capital outlays...not the subsequent depreciation hit to the P&L.

Secondly, pushing out opening also pushes out the P&L impact of said depreciation along with all other associated pre-opening costs that have been parked in pre-paids awaiting the opening date. If the park is at 30% capacity today, you certainly don't want year one of Tron (and Guardians and Rat and...) depreciation weighing down your P&L.

Since you brought up Velocicoaster, by your theory Universal should be chugging away on Epic Universe construction since it's depreciated. Keep building it! You won't see it hit until 2025! Nope, that's not how cash works. And it's why that construction site is a ghost town.

So incompetence it is not. It's corporate financial management and it's what you need to do when you are managing a company with a $300B+ market cap. We may not always like the in-park impact (and it may not need to go as deep) but it's reality.

Cash flow yes, P&L no. Does Disney have cash crunch where they need to worry about a particular quarter for a few hundred million? Absolutely not. Pandemic stall, so you can open with full capcaity is one thing, but the constant argument that Disney is a slow builder because they spread out their costs (which is an argument that far predates any pandemic) - bogus.

 

[EricsBiscuit]

Far from nonsense. Two very real financial impacts happening here.

Cash Flow management is first. Cash is King. While the P&L impact is depreciated as you point out, the cash flow is short term...gotta pay for the materials and contractors. Delaying the build delays the impact to the cash flow statement. In a COVID situation where inbound cash is pinched, controlling the outflows matters. In fact, in terms of capital planning, targets are set for the divisions in context of yearly capital outlays...not the subsequent depreciation hit to the P&L.

Secondly, pushing out opening also pushes out the P&L impact of said depreciation along with all other associated pre-opening costs that have been parked in pre-paids awaiting the opening date. If the park is at 30% capacity today, you certainly don't want year one of Tron (and Guardians and Rat and...) depreciation weighing down your P&L.

Since you brought up Velocicoaster, by your theory Universal should be chugging away on Epic Universe construction since it's depreciated. Keep building it! You won't see it hit until 2025! Nope, that's not how cash works. And it's why that construction site is a ghost town.

So incompetence it is not. It's corporate financial management and it's what you need to do when you are managing a company with a $300B+ market cap. We may not always like the in-park impact (and it may not need to go as deep) but it's reality.

TWDC has plenty of cash. I’m not sure what method they use to depreciate their theme park CAPEX, but if it’s straight line depreciation, 1 year of depreciation is a drop in the bucket for Disney. If they somehow managed to spend 400 mil, assuming a 20 year life span, at 20 mil a year, it is only a 5 mil/quarter hit. Anytime a project that should have taken about 2 years drags on, it’s incompetence. This is the same company that built Splash Mountain in < 2 years. Look at the increase in latency between ground breaking (forget announcement, then it looks even worse) and opening. It’s ridiculous and as a shareholder it really irks me. Uni has brought 2 new coasters (the best coasters in Orlando by any objective metric) to fruition in the same 4 years Disney has dragged their posterior w Tron. Uni has built rides in a year (Transformers). They could theoretically announce something tomorrow and it could be done before Christmas next year. Disney can’t do that.

Maybe but If something like RnRc is hard for me to handle, I doubt I could ever ride Velocicoaster

It’s extraordinarily smooth! Lots of negative G’s. It doesn’t bang your head around like Hulk.

 

[EricsBiscuit]

I’ve mentioned this enough times I gave up and just laugh now. It’s such a common thought on board it’s practically impossible to combat. Accounting 101

Exactly. For those who haven’t been exposed to accounting:

assets = liabilities + equity

Assets increase with debit, decrease with credit. Opposite for the other two. Credits must always equal debits.
If we buy a roller coaster for $400 million (for simplicity in one massive payment) it looks like this:
Credit cash $400 million
Debit plant/equipment $400 million

you then create a contra asset account called accumulated depreciation- plant/equipment.

Lets say you’re using the most simple depreciation, straight line. The asset is worth what you paid for it in capex. A coaster that costs 400 mil is an asset for 400 mil, no matter the market price. We divide that total by the lifespan, let’s say 20 years. $20 million/year. So every year you would credit the contra asset account $20 million (contra assets increase with credits) and debit equity by the same amount and labeling it depreciation expense. Once the accumulated depreciation equals the cost of the asset on the books, $400 million, you can’t depreciate it anymore. Hope this makes sense

 

[MiddKid]

TWDC has plenty of cash. I’m not sure what method they use to depreciate their theme park CAPEX, but if it’s straight line depreciation, 1 year of depreciation is a drop in the bucket for Disney. If they somehow managed to spend 400 mil, assuming a 20 year life span, at 20 mil a year, it is only a 5 mil/quarter hit. Anytime a project that should have taken about 2 years drags on, it’s incompetence. This is the same company that built Splash Mountain in < 2 years. Look at the increase in latency between ground breaking (forget announcement, then it looks even worse) and opening. It’s ridiculous and as a shareholder it really irks me. Uni has brought 2 new coasters (the best coasters in Orlando by any objective metric) to fruition in the same 4 years Disney has dragged their posterior w Tron. Uni has built rides in a year (Transformers). They could theoretically announce something tomorrow and it could be done before Christmas next year. Disney can’t do that.

While TWDC has plenty of cash we need to remember that the parks are managed on their own P&Ls. So while 1 year of depreciation is a drop in the bucket for Disney, it has a significantly higher impact to the Magic Kingdom's P&L. The fiscal year after 9/11 the Disneyland Resort had a loss for the year. Attendance dropped, per cap spending plummeted as locals replaced tourists, and they had a significant depreciation load on the books due to DCA/DTD/GC having opened months prior. The P&L for DCA proper was even a bigger mess (also driven by the horrific design choices for that park). Huge business impacts like 9/11 and the pandemic along with smaller ones that happen along the year mean that yes, it does really matter the timing of putting these assets in service when you're the one managing the Magic Kingdom P&L. And here's the kicker for WDW...success allows for complacency (unfortunately) and financial conservatism.

The parks are packed, occupancy at the resorts is high, and the return on a $200M+ new attraction will absolutely increase guest satisfaction scores but how much will it move the needle of the P&L is questionable at best. If Tron opened tomorrow at the MK would the MK see a massive bump in attendance and increased spending? Probably minimal with the current capacity restraints...which gives WDW the luxury of spreading out costs and being less urgent with their investments. As a fan that sucks. As a business model, not necessarily a bad thing. Incompetence it most certainly is not.