FY2012 TWDC financial results

[asianway]

Domestic attendance is up overall thanks to increases at DL-you know what that means for WDW...

Link to press release:

http://thewaltdisneycompany.com/sites/default/files/press-releases/pdfs/q4-fy12-earnings.pdf

 

[asianway]

Rasulo stammering through the analyst question about FL attendance...

WDW down "modestly" DL up "substantially"

Now pimping booking Pace for Christmas. NFE first big improvement in MK in 40 years.

 

[asianway]

Start up expenses related to NGE is a drag on operating income even though revenues are up. Hesitant to roll out more details about NGE during testing phase. "Getting close"

 

[WDW1974]

Crickets ... so numbers up in Anaheim, Hong Kong, Paris and Tokyo and higher on the high seas ... hmm, what are we not talking about?

And how are we going to make the numbers look better going forward? Up, up and away ...

 

[menamechris]

Clearly, the best way to handle this dragging attendance at WDW would be a huge ticket price hike. Genius!

 

[Taylor]

The answer more bathrooms always more bathrooms

 

[WDW1974]

Rasulo stammering through the analyst question about FL attendance...

WDW down "modestly" DL up "substantially"

Now pimping booking Pace for Christmas. NFE first big improvement in MK in 40 years.

Rasulo stammered because the numbers aren't good (what Spirit said so?) and clearly FQ1 of '13 hasn't started out very hot.

Imagine what the domestic numbers would be if Anaheim was struggling or if DCL hadn't more than doubled its inventory.

 

[Taylor]

I know this is crazy but maybe this will lead them to go all out on any expansion plan

 

[ParentsOf4]

From the Annual Report:

Results for the quarter at our domestic parks and resorts were comparable to the prior-year quarter as increased guest spending at Disneyland Resort and Walt Disney World Resort and increased attendance at Disneyland Resort were largely offset by higher operating costs. The guest spending increase reflected higher average ticket prices, daily hotel room rates and food and beverage spending. Higher operating costs were driven by resort expansion and new guest offerings, including investments in supporting systems infrastructure, labor cost inflation, and higher employee benefits costs.

Interpretation:

We continue to charge WDW guests more every year while spending money on things they never see. We can't understand why WDW attendance is down "modestly". We think the best way to improve free cash flow is to increase prices at WDW.

 

[Magenta Panther]

I know this is crazy but maybe this will lead them to go all out on any expansion plan

Well, they certainly should. The New Fantasyland looks beautiful, but nothing in it is as mind-blowing as what I hear Universal is up to with Harry Potter 2. Avatar hasn't got a chance against it, and anything with Star Wars is probably down the road a ways. TDO has got to stop being so timid and build another Tower of Terror or something!

 

[WDW1974]

Understand this. Whatever WDW builds at this point from Avatar to Cars Land to Monsters to any possible Lucas addition to Studios to some mystery project that hopefully is out there in hiding for EPCOT is at least 4-7 years away depending on when it is approved and budgeted.

This means that UNI and SW will have so much new product and Disney will have ... they'll have their NEXT GEN initiative featuring FastPass Plus ... oh, and a kiddie coaster at MK too!

 

[ParentsOf4]

WDW related items from the conference call. Sorry if I misinterpret some of the statements.

• Record revenue, net income, and earning per share.
• Good Q4 results.
• Things are not looking good for the upcoming quarter so TWDC is going to blame Hurricane Sandy, along with bookkeeping factors. They "did not see a rash of cancellations" at WDW. New Jersey attendance for Jersey Week seems as strong as previous years.
• Combined, all of the Parks and Resorts initiatives (e.g. DCL, FLE, Next Gen, Carsland, Hong Kong, Shanghai, etc.) will generate $500 Million in incremental revenue but also cost $500 Million of incremental expense.
• FLE "is going to be pretty spectacular". Sounds to me like WWOHP should be shaking in its boots.
• TWDC is spending a lot of money on Next Gen. This will allow people to "plan their itinerary ahead of time." Comment: Seems like a lot of money so people can do something they already can do. Thank goodness we have FP+.
• DLR attendance was way up because of the "great success of Carsland".
• They are hoping FLE will improve WDW attendance, feel good about upcoming bookings for Q1.
• However, they had several bookkeeping excuses to warn stockholders that Q1 earnings are not going to be strong, including at the parks, where an accounting change for the last week is going to shift about $30 Million into Q2.
• Attendance was driven by Brazil and Argentina, with the U.K. pitching in. Interpretation: If it wasn't for foreign visitors, WDW attendance would be really bad right now.
• "Transitioning out of investment mode" and "transitioning into a growth mode", "ramp down of capital spending". Interpretation: TWDC is going to be investing less at the theme parks.
• Star Wars: Eventually want to bring this into the theme parks. "Ability to expand our presence" "mostly internationally". Interpretation: TWDC does not plan any expanded Star Wars offerings at WDW or DLR in the foreseeable future.
• Domestic attendance was up 3% (up a lot at DLR, down "modestly" at WDW), spending on food & merchandise up 7%, revenue from rooms up 8%. Interpretation: Even though more people are coming to see Carsland, revenue is up significantly more than attendance because TWDC increased prices a lot.
• Hotel occupancy rates were down domestically to 78%.
• Domestic capital spending at the theme parks will be down about $1 Billion. In other words, TWDC plans to spend less at WDW and DLR in 2013. It doesn’t sound like they are rushing to build anything new at DHS or DAK in 2013. Even if they were going to build something major, I can imagine it would take WDI at least a year to design it, even if it's Carsland at DHS. IMHO, this is reasonable, given the amount of behind-the-scenes prep work needed to fit even a Carsland clone into the DHS footprint. However, it does suggest that TWDC won't be rushing anything to battle WWOHP2. I hope I'm wrong.
• WDW attendance was "down modestly". This despite the increased attendance from Brazil and Argentina.

Perhaps WDW does business differently but isn't down bad?

 

[asianway]

Park related items from the conference call. Sorry if I misinterpret some of the statements.

• Record revenue, net income, and earning per share.
• Good Q4 results.
• Things are not looking good for the upcoming quarter so TWDC is going to blame Hurricane Sandy, along with bookkeeping factors. They "did not see a rash of cancellations" at WDW. New Jersey attendance for Jersey Week seems as strong as previous years.
• Combined, all of the Parks and Resorts initiatives (e.g. DCL, FLE, Next Gen, Carsland, Hong Kong, Shanghai, etc.) will generate $500 Million in incremental revenue but also cost $500 Million of incremental expense.
• FLE "is going to be pretty spectacular". Sounds to me like WWOHP should be shaking in its boots.
• TWDC is spending a lot of money on Next Gen. This will allow people to "plan their itinerary ahead of time." Comment: Seems like a lot of money so people can do something they already can do. Thank goodness we have FP+.
• DLR attendance was way up because of the "great success of Carsland".
• They are hoping FLE will improve WDW attendance, feel good about upcoming bookings for Q1.
• However, they had several bookkeeping excuses to warn stockholders that Q1 earnings are not going to be strong, including at the parks, where the last week is going to shift about $30 Million into Q2.
• Attendance was driven by Brazil and Argentina, with the U.K. pitching in. Interpretation, if it wasn't for foreign visitors, WDW attendance would be really bad right now.
• "Transitioning out of investment mode" and "transitioning into a growth mode", "ramp down of capital spending". Interpretation: TWDC is going to be investing less at the theme parks.
• Star Wars: Eventually want to bring this into the theme parks. "Ability to expand our presence" "mostly internationally". Interpretation: TWDC does not plan any expanded Star Wars offerings at WDW or DLR in the foreseeable future.
• Domestic attendance was up 3%, spending on food & merchandise up 7%, revenue from rooms up 8%. Interpretation: Even though more people are coming to see Carsland, revenue is up significantly more than attendance because we increased prices a lot.
• Hotel occupancy rates were down domestically to 78%.
• Domestic capital spending at the theme parks will be down about $1 Billion. In other words, TWDC plans to spend less at WDW and DLR in 2013. It doesn’t sound like they are rushing to build anything new at DHS or DAK in 2013.
• WDW attendance was "down modestly". This despite the increased attendance from Brazil and Argentina.

Perhaps WDW does business differently but isn't down bad?

Because I like to sound like a broken record: "At what point do heads roll at TDO?" I'm sure all the excuses are that NFE will turn things around...is that their last coil of rope?

 

[Disneyhead'71]

So Disney is acknowledging the soft occupancy rates that many on here have been saying all along. I guess some around here just LOVE crow pie.

 

[powlessfamily4]

It's actually not an overly bad report. Could it better? Yes, however it could also be worse. At least they recognize the problems and can now focus on fixing them as best as they can.

On a side note, those who are always so negative and seem to know what needs to be done.... why don't you go apply for a position so they can use all of your vast knowledge and fix the issues? I am sure you more than qualified to run the company and make the complex financial decisions.

 

[SirLink]

It's actually not an overly bad report. Could it better? Yes, however it could also be worse. At least they recognize the problems and can now focus on fixing them as best as they can.

On a side note, those who are always so negative and seem to know what needs to be done.... why don't you go apply for a position so they can use all of your vast knowledge and fix the issues? I am sure you more than qualified to run the company and make the complex financial decisions.

If a person with vision gets interviewed by an executive with no vision - chances are the person with vision wouldn't get employed - as the only reason why a certain executive who is in over her head was promoted to that position was because Jay 'I hate theme parks' Rasulo wanted 'YES' men.

Hence why I can't wait for next CEO to come in and do some spring cleaning in WDI, P&R and even Consumer products to end this One Disney mentality.

 

[Mammymouse]

Do you think that if TDO top people would consent to visiting WDW as "average" tourists they would get what we get frustrated about? You know - book a DVC , value or moderate hotel for 4 days, put on their bermudas or cargo shorts and tees, eat at a just couple sit down reservations like the character buffets and then the rest of their meals at the counter service places for the 4 days, wait in line for attractions and race to get a few fast passes each day, and buy a few snacks and souveneirs. And most importantly take the kids - if they don't have any then borrow some grandkids or nieces and nephews. What did I leave out? Oh yeah - let them purchase the entire trip (I suppose they could get reimbursed afterwards though), go through check in at the hotel and of course take the buses! Just so they get the real experience, not an elite one. Just saying.........

 

[powlessfamily4]

If a person with vision gets interviewed by an executive with no vision - chances are the person with vision wouldn't get employed - as the only reason why a certain executive who is in over her head was promoted to that position was because Jay 'I hate theme parks' Rasulo wanted 'YES' men.

Hence why I can't wait for next CEO to come in and do some spring cleaning in WDI, P&R and even Consumer products to end this One Disney mentality.

and that is the problem.... usually people with vision have no concept of finances and vise versa. It's mucky water to be sure. We can only cross our fingers and hope for the best.

 

[Atomicmickey]

Understand this. Whatever WDW builds at this point from Avatar to Cars Land to Monsters to any possible Lucas addition to Studios to some mystery project that hopefully is out there in hiding for EPCOT is at least 4-7 years away depending on when it is approved and budgeted.

This means that UNI and SW will have so much new product and Disney will have ... they'll have their NEXT GEN initiative featuring FastPass Plus ... oh, and a kiddie coaster at MK too!

Sadly, this is true. It's hard to say too little, too late . . . because due to their behemoth size, they
can weather this. What's unfortunate is that they shouldn't have had to. Now is the time when their
incessant focus on cost cutting and diminished guest experience is really going to show itself and
impact their bottom line in the next few years.

I do expect that the marketing machine will crank up for FLE and do what it can to attract really
young families. That's all they've got at this point, all they can do to slow the negative numbers.

I know that as much as a fan as I am, I'm really not planning to go back until the Mine Coaster is finished.
I'd like to experience FLE as a full environment, since it doesn't really have any attractions to draw me
right now. I think it'll be awesome to walk through when it's done, and I'm hopeful that the coaster, while
a "small experience" will be unique and charming enough to give a boost to the area.

I guess, as fans, we just have to wait a few years before seeing anything. If they can get some of these
projects into high gear, well, we just have to wait a few years. In the meantime, yeah, I'm pretty
psyched about Potter 2.0. I wish we had next-gen experiences like that coming to WDW, instead of
next-gen food ordering consoles . . . .

Get busy, WDW. We want you to do well, but we can't do it for you. And we won't go, if you don't
work on the show . . .

 

[powlessfamily4]

For WDW fans,

Hey guess what.....I am a WDW fan. Hence the hanging out on this forum!

I'm not optimistic about WDW's future for the next few years. I hope I'm wrong and they announce something major on December 7. (You know, the day the Germans bombed Pearl Harbor.)

I know the day well.... My son was born that day 20 years ago, we lived in Hawaii and it was the 50th anniversary. We always celebrate that day regardless of what happend around the world. I will be at WDW on December 7th this year.