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News Tron coaster coming to the Magic Kingdom

dreday3

Well-Known Member
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! :D
 

gorillaball

Well-Known Member
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

Well-Known Member
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

Well-Known Member
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

Well-Known Member
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

Well-Known Member
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.
 

MansionButler84

Well-Known Member
In the Parks
No
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.

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.

It’s extraordinarily smooth! Lots of negative G’s. It doesn’t bang your head around like Hulk.
It would make more sense to me if they finished these projects now and sat on them like Rat. I understand not opening Rat, TRON, and Guardians this year. That would be silly. Open the coasters next year to drive attendance. However, it is clear they are viewing FY21 as a write-off. Why not finish these rides now so those expenditures are swept out with the dirty COVID mop water on 9/30/21? No one expects huge profits this year, but finishing construction now and waiting 6 months to open would artificially raise FY22 profits as guest spending increases due to the previous year’s spending.
 

EricsBiscuit

Well-Known Member
It would make more sense to me if they finished these projects now and sat on them like Rat. I understand not opening Rat, TRON, and Guardians this year. That would be silly. Open the coasters next year to drive attendance. However, it is clear they are viewing FY21 as a write-off. Why not finish these rides now so those expenditures are swept out with the dirty COVID mop water on 9/30/21? No one expects huge profits this year, but finishing construction now and waiting 6 months to open would artificially raise FY22 profits as guest spending increases due to the previous year’s spending.
It wouldn’t make a huge difference for next year if it was the first or second year of depreciation. It’s better to carry the depreciation expense when you’re making a profit so as to pay less in taxes. That actually might be the reason they delayed it now that I think of it. For buildings, no depreciation is done until it’s actually working for the business. So, Disney wouldn’t start depreciating until the first guests ride.
 

Bocabear

Well-Known Member
and no loops... a series of dive maneuvers and lots of trim brakes... It is fairly tame after the initial launch and outdoor section.
 

Jrb1979

Well-Known Member
The launch is the thrill...and the travel across the canopy...indoor section is so short and then you are headed back to the station...kinda nuts. Glad there was no line at all in Shanghai...we rode it three times in a row.
From videos I have seen and what others have said, its on the same level as primeval whirl.
 

Bocabear

Well-Known Member
Yeah it is way better than Primeval Whirl...lol
It is a nicely themed, beautiful coaster... It's biggest problem is the length of ride is just WAAAAY too short. It is also over braked throughout the show building which kind of ruins the experience....It is a nice ride, but a poor fit for it's location for so many reasons...and with available space to fill in Tomorrowland and several attractions that need replacing it was an odd choice from the getgo.
 

Surferboy567

Well-Known Member
Yeah it is way better than Primeval Whirl...lol
It is a nicely themed, beautiful coaster... It's biggest problem is the length of ride is just WAAAAY too short. It is also over braked throughout the show building which kind of ruins the experience....It is a nice ride, but a poor fit for it's location for so many reasons...and with available space to fill in Tomorrowland and several attractions that need replacing it was an odd choice from the getgo.
I can agree with it being very short, the thing about me is that TRON and TRON Legacy for me is one of the most underrated movies. So seeing any kind of representation makes me happy. Also, I just really want to ride a Lightcycle. So, maybe I am a little biased toward TRON. Very excited to try it for myself.

I can also agree Tommorowland definitely needs attention. Hopefully TRON is a harbringer of things to come.
 

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