Yesterday (11/10/16), the Walt Disney Company held their quarterly earnings call. Typically this call has some fun nuggets of information and this call was no different.

Participants in the call included:

• Bob Iger, Chairman and Chief Executive Officer
• Christine McCarthy, Senior Vice President and Chief Financial Officer
• Lowell Singer, Senior Vice President, Investor Relations

The call started with prepared statements by Iger and McCarthy.

Iger boasted that 2016 is the 6^th consecutive year of revenue growth. However, they expect only moderate growth in 2017 with a return to high revenue growth in 2018 due to the slate of movies with 2018 release dates such as Star Wars and Marvel universe offerings. He was also elated to report that Shanghai Disney has already welcomed 4,000,000 guests. They feel a 10,000,000 first year is well within reason.

McCarthy warned listeners to not compare the 4^th quarter of 2016 to 2015 too literally because the 4^th quarter of 2015 included an extra week due to how the calendar fell. Regarding the Disney Parks and Resorts, she said that Disneyland attendance did fall in 2016. However, that was expected since 2015 featured the 60^th anniversary celebration of the park which bolstered attendance. She also surprised listeners by reporting that Shanghai Disney will likely break even financially in its first year. Given rumors of the cost overruns, this is great news. When it comes to Disneyland Paris, they are underperforming due to fear of terrorism in Europe. She also reported that Walt Disney World took a $40,000,000 hit in October due to the parks being closed for a day and a half when Hurricane Matthew blew through.

The question and answer portion of the call delved further into the contents of the prepared statements and the earnings release:

Why do they feel ESPN will grow?

• Popularity of programming; opportunities in ad rate structure; Investments in buying a 33% stake in BAM Technologies

Why will Shanghai Disney break even given the cost overruns?

• Very successful opening (# of people); high customer satisfaction; attendance is wide reaching (not just the Shanghai area – 50% outside of Shanghai), guests staying longer than expected; Expansion has already begun

How will growth continue in 2017/18?

• Pricing leverage (not just in price increases, reorganizing packages); hotel expansion due to high occupancy; leverage Star Wars better to US and global markets

Why is NFL viewship down?

• This is an anomaly. Exciting post-season baseball and the heavy election coverage has effected ratings. This is not a long-term concern.

Are there any potential acquisitions?

• There are some interesting opportunities – none able to mention at this time, looking at direct to consumer

What is the succession plan to replace Bob Iger?

• Process is on-going; board will chose the right candidate on a timely basis

How has Hong Kong Disney been effected by the opening of Shanghai Disney?

• No negative effect on Hong Kong Disney directly related to Shanghai Disney

Did the start of school in China effect attendance at Shanghai Disney?

• Have not seen any effect… yet.

The earnings release mentioned strengthening technological capabilities. What does that mean?

• Increase online sales; redo DisneyStore.com; integrate BAMTech in line-up

How do you see the election of Donald Trump effecting the future of the Walt Disney Company?

• Really too early to speculate however, if Trump holds to his campaign promise of reviewing corporate tax policies which are out of line with the rest of the world this could positively affect company; a smooth transition of power will help business; they are already in the process of adding President-Elect Trump to the Hall of Presidents

What is the outlook for consumer products?

• 1Q will be lower than last year because of the huge 1Q last year due to Star Wars merchandise, Cars 3 and Spiderman will help with consumer products growth in 2017

What are your thoughts on the Nielson ratings?

• Their results contradict other providers, Disney is asking them to review their methodology

What is the future of delivering non-sports Disney content direct to the consumer?

• While no timing has been discussed, they feel this is inevitable, they will be studying the product currently being offered in England

Why did the programming cost line item increase in 2016?

• This is primarily due to the NBA deal which accounted for $600,000,000, there is no deal yet with the Big 10

There are a couple of key point to glean from the call which will affect the Parks & Resorts:

• High occupancy rates at Disneyland and Walt Disney World Resort have precipitated the planning stages of expanding their hotel offerings. (New hotels coming?)
• Shanghai Disney is outperforming estimates. (No more #ThanksShanghaiDisney)
• They are already in the process of adding President-Elect Trump to the Hall of Presidents. It was previously reported early last month that this attraction would be closed for refurbishment January 17 – June 29, 2017.

Honestly, there were really no surprises in this call. (Well, maybe the tidbit about adding new hotels.) The Walt Disney Company is a well-run, diverse company. We have no worries. Our favorite place in the world will be here for years to come.

Sue Nowicki is an alumnae of the 2014/15 Disney Parks Moms Panel. She splits her time between planning her next Walt Disney World vacation and being team mom to ten high-energy volleyball players where she fills the roles of secretary, navigator, head cheerleader, treasurer, athletic trainer and team psychologist. You can follow her on Twitter @JazzinDisneyMom.

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