Spirited News & Observations II -- NGE/Baxter

[Rodan75]

Wow...someone needs to shut this baby down. The attacks are ridiculous, no wonder this board is starting to get a bad reputation.

 

[Soarin' Over Pgh]

While there's such a strong numbers/figures boom going on here... my Mom asked me a question when we were sitting on the beach of the Polynesian last week and I don't know the answer to. Maybe one of you does?

She asked: How much does WDW make in one day off of ticket sales, merchandise, etc. at the parks?

I've looked but can't find a solid enough answer for just WDW parks for one day. Anyone want to take a swing at it?

 

[flynnibus]

Your last paragraph is my main point. The cash has been spent but the expense has not been incurred. The investment must continue to AT LEAST cover the depreciation, . This is why Disney builds slowly. You spread out service dates so the giant depreciation bubble doesn't pop all at once, but oozes slowly.

The extended depreciation is a benefit for both companies -but it has nothing to do with 'building slowly'. Your hit for depreciation has nothing to do with how fast you built it.. building it slower only hurts you in that regard in that you are pushing back the date it was put into service. The situation Disney is trying to manage is not deferring depreciation.. but trying to micromanage PNL in the near term.

Building slow and depreciation hits have nothing to do with one another.

Since these are capital improvements in long term goods that the company will never really try to liquidate, the depreciation is a benefit to the company. It's not like inventory sitting around depreciating that the company will ultimately have to take a hit for. The depreciation on the capital improvements represent tax benefits on dollars the company would have spent regardless.. and brings benefits on taxes on their assets.

The depreciation schedule has almost nothing to do with how long you took to build it.

The depreciation bubble you are hyping really isn't much of a factor here. Having to write off has limited impact on the company's long term outlook... what matters more is the perceived success or future success of the company when they have to write stuff off early. The dollars are actually a tax benefit.. it's the market perception that you have to manage.

 

[flynnibus]

I've looked but can't find a solid enough answer for just WDW parks for one day. Anyone want to take a swing at it?

You can't answer that directly.. but you can make some guestimates based on info available...
- you know rough attendance...
- you know rough guest spending on average...

What you don't know if Disney's profit margin just on theme parks. Their profit margins are wrapped up in all of the P&R division. But it doesn't make a lot of sense to focus on margins in isolation in a model like Disney.. since its an eco-system intended to increase the spending from the single customer. Spending per guest, and overall margins is what are most important.

I just wish Disney would remember that with the Dining Plan...

 

[Tim_4]

The extended depreciation is a benefit for both companies -but it has nothing to do with 'building slowly'. Your hit for depreciation has nothing to do with how fast you built it.. building it slower only hurts you in that regard in that you are pushing back the date it was put into service. The situation Disney is trying to manage is not deferring depreciation.. but trying to micromanage PNL in the near term.

Building slow and depreciation hits have nothing to do with one another.

Since these are capital improvements in long term goods that the company will never really try to liquidate, the depreciation is a benefit to the company. It's not like inventory sitting around depreciating that the company will ultimately have to take a hit for. The depreciation on the capital improvements represent tax benefits on dollars the company would have spent regardless.. and brings benefits on taxes on their assets.

The depreciation schedule has almost nothing to do with how long you took to build it.

The depreciation bubble you are hyping really isn't much of a factor here. Having to write off has limited impact on the company's long term outlook... what matters more is the perceived success or future success of the company when they have to write stuff off early. The dollars are actually a tax benefit.. it's the market perception that you have to manage.

My fault for not being clear. There are large portions of these projects that are expensed as incurred because they dont meet capitalization thresholds. Delaying openings prevents you from incurring those expenses AND depreciation at the same time. This is why you'll often see soft openings and cast or AP preview days occurring at the end of a quarter. Incur all the training and start up costs in one quarter, then depreciation kicks in upon the Grand Opening in the subsequent quarter.

Another strategy is the phased approach. By delaying individual phases, you pick and choose which parts start depreciating when, rather than everything all at once. This helps in year over year comparisons, where gradual change is much better perceived than dramatic fluctuations.

 

[flynnibus]

My fault for not being clear. There are large portions of these projects that are expensed as incurred because they dont meet capitalization thresholds. Delaying openings prevents you from incurring those expenses AND depreciation at the same time

The non-capital expenses I agree - and why I said they are micromanaging their PNL in the short term. It's a byproduct of being a slave to the financial reporting and scrutiny the anonymous numbers attract. In a long term, these these don't matter.. but in a short term shifting dollars forward and back is used to massage the reports to minimize variations and swings in the comparisons. Depreciation should really be left out of this all together.

None of this is to benefit the customer.. and none of it is about long term. It's accounting shuffles to avoid disruptions in the trends and to maximize/minimize tax implications.

Another strategy is the phased approach. By delaying individual phases, you pick and choose which parts start depreciating when, rather than everything all at once. This helps in year over year comparisons, where gradual change is much better perceived than dramatic fluctuations.

Again.. micromanaging the 'costs' side of the equation because you have little faith in the revenue side of the equation. This is all defensive posturing where you try to maximize the smallest input possible. It benefits the company because they have 'something new!!' to advertise for that much longer without doing anything more. It's stretching out the least.. instead of creating draw with a successful product.

 

[openendedsky]

It was a joke!!

I absolutely adore Sea World and am more excited about Antarctica than anything I can recall being excited about in Orlando!

Fantasyland, Schmantasyland. Transformers, Balformers.

BRING ON THE PENGUINS!!!

...and I'm going to freaking miss the opening, damn it! If anyone goes and takes pics, PLEASE post them!

penguins?

When my children were 5-to-8, we had a hard time finding age appropriate attractions for them at Uni. No such problem at WDW.

No way around it, Uni appeals to a more mature crowd. Most of Uni's "best" attractions are for the 48" and over crowd. Boy or girl, a lot of the 10-to-12 crowd want to do the "grownup coasters". The ones I know followed their heights closely, hoping to reach the magical 48" and 54".

My first time going to IOA was when I was eight (a year or so after the park opened), and I was tall enough to ride everything and generally didn't have a problem (exception being Jurassic Park. I was a cry baby).

I so agree about EE. That whole area is so well done. And all of it builds to the moment the Yeti takes a swipe at you. But now the Yeti doesn't work, so it's all rather anti-climatic.

I still like the area and the ride a lot! But it isn't what it should be.

I never had the opportunity to ride while the yeti was functional, but this makes sense and explains why, as much as I love the ride, I always felt like there was something missing.

But if Disney had done it, y'all would be in an uproar. Uni gets excuses.

I don't think I could name anybody that's happy that they stopped dueling. So, no. I understand why they did it, as safety is above all, but I'm not happy.

 

[flynnibus]

Uni raised ticket prices this weekend.

Insert righteous indignation here.

You mean raising prices while demonstrating opening new attractions.. and demonstrating a commitment to further expansion in the near term?

Sure beat's Disney's model of 'its a new year, time for a new price' sales pitch.

I think the price increases of both last year this year have demonstrated more that Uni is trying to step out of the shadow of the mouse and put their image down as worth their price of admission.

 

[wdwmagic]

Can we remain respectful to each other and stop the name calling and insults. Some of the posts in this thread are way out of line. Thank you.

 

[Lee]

Can we remain respectful to each other and stop the name calling and insults. Some of the posts in this thread are way out of line. Thank you.

Hmmm...I missed those...
Reckon I was too dizzy and disorientated from all the accounting mumbo-jumbo flying around...

 

[Soarin' Over Pgh]

penguins?

.

As a Pittsburgher... and a Pens fan... I approve of this message.

 

[RSoxNo1]

Attractions aren't revenue generating. Capex eventually depreciates, and if they don't get the asset lives right, they're in for major write offs when refurb time rolls around.

It all boils down to whether Potter is a permanent boon or a temporary one. They can't expand at this pace forever. There isn't enough cash or space. If expansion is the only way they can get new revenue streams, they're screwed. You just can't expand forever.

Attractions aren't directly correlated to revenue generating, but all of the other revenue generating items exist because of the attractions. It's just harder to quantify how quickly an attraction provides a Return on Investment.

 

[openendedsky]

As a Pittsburgher... and a Pens fan... I approve of this message.

Too bad I'm a Flyers fan.

 

[Soarin' Over Pgh]

Too bad I'm a Flyers fan.

That's OK. I'll forgive you.

This time.

 

[RSoxNo1]

So Potter 1 is literature but Potter 2 is in a studio? But they're connected? Can't wait to see the Potterites tie themselves in knots to explain that continuity.

Hence the "loose" connection. You also have the movie characters visible in the ride in IOA. As I said, it's a loose connection at best.

 

[Goofyernmost]

Hmmm...I missed those...
Reckon I was too dizzy and disorientated from all the accounting mumbo-jumbo flying around...

Yea, that has been absolutely fascinating hasn't it? Almost as fascinating as it has been irrelevant to anyone of us. How much anything costs them is not my problem. All I have to do is pay my money and have something to enjoy on the inside. While I'm thinking of it...doesn't the Emoticon I just used look more like constipated then confused? Just saying.

 

[PhotoDave219]

As a Pittsburgher... and a Pens fan... I approve of this message.

As a Flyers fan, I say Death to Pittsburgh & I've never seen a girl dive as much as Cindy Crosby.

 

[PhotoDave219]

Wow...someone needs to shut this baby down. The attacks are ridiculous, no wonder this board is starting to get a bad reputation.

I don't see those attacks. My guess is that I have the guilty parties on ignore.

 

[baymenxpac]

That's OK. I'll forgive you.

This time.

we almost had you in round 1, dude. let's go islanders.

and @Tim_4: thanks for the insight. some very interesting stuff the last few pages. appreciate it!

 

[marni1971]

If you weren't a regular, DHS is a full day and the other parks take longer as well. Being a regular, you have your favorites and know what to skip. However, if you were last there five or ten years ago, like the average guest, you'd go see every show and ride every ride. We all evaluate full day versus half day through our own personal lenses but many of us skip Beauty and the Beast or Idol or Indy or LMA or all of the above. There's a full day of stuff to do at DHS, just not a full day of stuff you FEEL like doing.

Can't argue. Well, could, but its not worth it.