Walt Disney Co (The) (DIS)

Lowell Singer SVP, IR
Bob Chapek CEO
Christine McCarthy Senior Executive Vice President and CFO
Alexia Quadrani JPMorgan
Ben Swinburne Morgan Stanley
Jessica Reif Ehrlich Bank of America
John Hodulik UBS
Michael Nathanson MoffettNathanson
Jason Bazinet Citi
Kannan Venkateshwar Barclays
Steven Cahall Wells Fargo
Call transcript
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Ladies and gentlemen, thank you for standing by, and welcome to the Walt Disney Company's Fiscal 2020 Third Quarter Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Lowell Singer, Senior Vice President of Investor Relations. Thank you. sir. ahead, go Please

Lowell Singer

welcome call. Walt and quarter Company's XXXX earnings to afternoon Disney the third Good

doing release hope issued Today's are of press the available on your being Our on was from and joining webcast our everyone is ago webcast and well. We will homes website us available and and our a today at also copy website. you www.disney.com/investors. a call is transcript also about is we of XX be minutes most realize

We also remotely. are today's hosting call

So Executive from Financial their President Senior Disney's joining phones me Chief are Officer; Executive Chapek, Bob Officer. and McCarthy, Chief and Christine Vice

Following comments be to from take we'll happy some questions. and Bob Christine,

call to turn So with to me that, Bob over let get the Chapek started.

Bob Chapek

you're These world. people's staying been well Thanks, of Lowell, we way all pandemic of businesses and doing and remain continue deeply for life our be of good safe. challenging The times impact our communities, the challenges on the front has hope to and the lives, afternoon, and get have and and to been healthcare I this devastating, appreciative injustice doing in their center in pandemic, with through Along leaders part community social difficult period. the by issues workers, nation's of us the also the months. racism everyone ours consciousness recent and posed and researchers, everyone,

and have We the have across and strategic in six established been greater inclusion area working closely critical new diversity with to our members employees and company. this cast pillars achieve

strive greater in workforce our We content. are advancing both inclusion committed representation and and as to initiatives towards strongly these creative we

progress. compared businesses results. in on $X.XX will the a disruption in Paris, a last Since unprecedented our a pandemic. talk as Christine reopening realities today, of our and we've call, have our harsh this Downtown impact Orlando, share of Anaheim. had know, encouraging begun about share our to the $X.XX and result the we as third were the last majority quarter. responsible as down experienced you in have we As a Shanghai, more was parks EPS quarter shut worldwide made Most Tokyo, year. quarter results Adjusted dining of facing well our are and huge a businesses some earnings in depth for phased area Despite Disney shopping the our of

We safety have temperature health prioritized a and distancing. mandatory protocols and policy, restrictions include promote social guests our of have capacity the screenings, members disinfecting, and cast increased that and cleaning well as mask to as instituted

making very NBA and WNBA Along of the Disney work ESPN also and on health and restarts World and situation We the are as and resumption MLB. successful with sports seasons the fluid in MLS of continue the national adjustments with local necessary. live of major this within bubble pleased to government of the millions return Walt with and officials including we're fans,

the initial globally, far Japan. service. exceeding also and on launched we paid top the Another some Walt future markets, Western of businesses. our to our and we Company, Europe, same for time, the direct-to-consumer managed challenges in deliberate the domestically of it thoughtful domestically in am innovation focused pursue November, as has television and February, CEO positive number I continue When a million to and risk development surpassed pleased will since note rolled the successfully our film see emphasized XX.X our bold priority announce that of very been and as including I initial Last advancing became out I we and which restarting to both Disney+ of overseas. productions, company. At projections incredibly yesterday, we the we've been steps taking lifeblood of Disney innovative pandemic, is our and take we've running despite that major storytelling, business, growing and creative that, in our we've of of to and key India international have subscribers the also the the to

to our a of we've in continue us The force sub As thus direct-to-consumer global year subscriber tremendous projections also every launched than in Disney+ in grow, global numbers far. clearly less a space. we've exceeded success internal establishes the as major major market our

Hotstar When our X the November. we world's We most Portugal Hulu the Indonesia, international And and in populous will announce one in that continue businesses, happy now strategy out world. you will of the in launch By milestone combined September, XX ESPN+, a expansion look is This America Luxembourg top significant of will in for reaffirmation full economies be a of our available XXX Disney+ of million exceeds Disney+ rolling our Belgium, I'm global astounding this and in to paid and on with our Disney+ September the countries. an in across year-end, the of portfolio direct-to-consumer Nordics, also subscriptions. be nine Disney+, Latin and at growth. reach

has approach. achieved us future business about our more date the fact, more we've be direct-to-consumer in made success the aggressive even our our incredible to In confident and of to ability

for of One a August for of coming power the debut Ivan, just also streaming season Disney best already the XX this Drama host which include incredible and forward, then interpretation that at productions lead we programming even months. Highlights is to Disney content and set streaming entities, bold innovative the will service Disney+ an the our Disney+ of provide pursue Walt bears produced with The the an the are Company's and you Both some Primetime week awaiting XX continue we're Going accelerating millions company. the business. grow aggressive more upcoming stuff impressive the as of an we'll beginning about service. and streaming, a speaks shown to received content. for details to XX to The Skywalker, success. you second fast-tracking live the debuts our of debut Hamilton across investor television, By premiered Only has initiatives with service. in new and is and celebrated Mandalorian the Mercury like huge to content opportunity clearly visual plans combining the approach and film in theater, to live coupled the and the presentation Star demonstrated really October. stream cable, honored of this trends there's have the We've seeing from given platform us And premiering creation which great inspiring with diverse confidence, to to nominations, that our acclaim, Emmy way this on engines viewers elements to I'd pipeline fall. exclusively we more take will anticipated And it's actions, Disney+, and upcoming multi-channel share universe, power experience being anxiously Onward black a And phenomenon. by Project right world-class had Emmy week, first noting The stunning more a experience. last last content It to Black whole have artistry its we widely millions on entities will Frozen series this X, including been of Rise an Outstanding which of album, iconic fans King, the the was of of National Pixar's Hamilton cultural Black Disney+, Geographic which creative studio for Series, blockbuster is XXX cast, NASA's premiere highly Beyonce's in The Wars: Broadway's of the nominations critical our were King

do a way confident during when with I amidst As resuming to we've the that our best in the find franchises some and will pandemic. teams pandemic most been to industry. able creative we in pipeline and ways said we're to resume earlier, we fully to innovative creative activities we've begin many operations, companies, business of the able our of be meaningful so popular the some conduct Like can had

unpredictable it's as and during different While for challenging process, devastating of ways to this number impact look order opportunities. a we film meet timely them we're family-friendly consumers Unfortunately, to important to times for this our in ways affected, delay view to of forced highly better manner. to theaters. period. COVID also we've on bring release due was this situation find anticipated Disney's the exceptional needs we it Mulan the tentpole during serve to period, of alternative consider film the this to a consumers had to approaches In of a us the new discovering In everyone thought

slightly offering countries. announcing Disney+ adventure $XX.XX that beginning countries subscribers are a We in markets are and be this film and also an will epic Australia, the we Europe, certain markets this number in plans premier a theatrically movie releasing with point price U.S., Canada, and today in basis including and the most this Disney+ Disney+ open. New theaters, content. We will in have X. Simultaneously, will be as access U.S. see enhancing unable we attractiveness of September The be announced incredible Disney+ subscription a currently the in further on other a currently the theaters launch on bring for Mulan to no Western vary the to while will film to Disney+ audience of go where broad we value where to Zealand opportunity great

international that am more to with under Fox end, the and the and from entertainment general Disney+ content direct-to-consumer Studios Hotstar production extending to year fully markets, and which fact and Given Mirroring a engines entertainment Disney+, FX, demonstrates offering, to many established by both grow believe entertainment consumer with other our we platform from growing particularly perspective, a of general platform offering utilized XXXX. we In value and be the rapidly ABC offering we addition it Star the our behavior, the internationally. Television, launches, been technology will in critically company launch important in rooted in will Freeform, and clearly continue with rapid the content, ever offering customers, as be brand will the India. the distributed than I into has strategy Studios, it the it our prolific Disney+ general Searchlight. Star is content relationship were an XXth in pursued domestically Disney+ value globally, Century successfully our brand further marketing under successfully changes the we Star-branded for of calendar of the of The plan pleased direct is and we be we libraries as both has acclaimed our that own that and through to announce this integrated that also

mentioned, storytelling Day marketplace take hosting our in for, into will we and we we and the the opportunity. exceptional light focused of to affinity be another Star we've you thus demonstrated to with by bolstered Disney+, reiterate tremendous as about around that this Hulu, about the the deliver on far space, see optimistic Christine. ability opportunity end, could our Investor our and and across to as coming me as to direct-to-consumer consumers Personally, success our brands, it I'll coming am that months, months. in I direct-to-consumer their business of that way Let I brands. global ESPN+ push and intend a direct-to-consumer our in accelerate advantage the plans to I'm achieved I our turn share over franchises more be the with tremendous in have world that, excited the plans full forward To With the the

Christine McCarthy

good and everyone. afternoon, Bob, Thanks

results third were financial significantly our mentioned, Bob COVID-XX. impacted the fiscal by quarter As in

cost where this is diluted note affecting per from and was $X.XX. in XXCF income operating impact the acquired. the this both reflect of the approximately results our Excluding $X earnings the disruption We a estimate period assets of quarter quarter's comparability, mitigations. third adverse billion full items we operations share certain quarter current on I'll first prior-year were of net segment quarter COVID-XX-related

our segment with and reductions. the most aggregated as adverse $X.X Parks, puts to billion, businesses benefit of and revenues lower and of Our affected a offset across deferrals Products while was generally cost other an Experiences were impact the severely net by benefit the cost takes

these future quarters of timing cost to many deferrals in primarily sporting the reverse events. of expect shift due to We

XXXX, are we businesses, parks our of members, enhanced as safety to to have these it not costs well addressing We have relates the As costs could various limited and the incur measures end will as These regulations. we continue resuming costs related as government to content fiscal production reopen incremental and to guests incurred as our through and film our of but many we additional include as television at estimate place talent into the $X responsibly well approximately resorts. that cash put billion. total and of incremental of cast

our capitalized be resorts, expenditures, and entirety of the largely Paris amortized and reflect At line and those parks business these quarter. productions Parks, and the restarting Products, of cruise to quarter many expect closures We related particularly Disneyland over to third domestic the future Experiences of results for periods.

resorts also quarter Kong XX Hong Hong and May for closed Kong Shanghai were and June reopening Shanghai on Our reopening the part on of XX. with

to However, Hong July XX Kong a was subsequently government order. due closed on

business As results operating due objective At will we attendance of and contribution also COVID COVID-XX. the operating at a grow net Walt loss prior of These billion. situation at we of when significantly Products versus positive impact at in current disruptions, adverse $X result are of Parks, the these Products to levels our driving World, effects a expect Disney improves. results widespread reflect and achieving Florida demand Experiences declined year to an the our Consumer an about

what internationally, and particular, seen Shanghai at have with since are monitoring reopening sites pleased trends in We closely been in reopened our May. we've at also

Studio timing exists of still distribution lower COVID-XX. confident of TV/SVOD experiences ability these guests costs higher results, quality by Worldwide businesses, remain theatrical operating income offset the At than impairments adversely to for uncertainty by long-term are quarter were impacted to and results. our committed were more lower in and reopening marketing creating our assets. value some film entertainment for lower regarding through While distribution in generate results as high theatrical we Entertainment, the decreased all home our

titles, in Avengers a Game window. Onward, closure Higher content in parties of were comparison outstanding Skywalker the released library were the prior-year no Wars: End domestically Given quarter. resulted This and sales significant The Star performance against of a TV/SVOD Rise the both quarter. by driven by in Disney+ the including the titles decrease in to in offset internationally, and theaters, of to results partially pay third sales difficult

due revenue. both up was increase production lower and an revenue, to at Media higher Turning third from sales result increases advertising partially were a affiliate new in partially programming due increase income At and quarter offset operating lower The costs. was Broadcasting, to marketing was to as shutdowns Networks, timing operating the decrease lower Cable. production costs accounting a programming higher production in of impact in and by due These Broadcasting by COVID-XX, to largely offset and in results the income program costs, guidance.

have July costs affiliate including the and higher The revenue. impact lesser XX% are extent was Politician. from quarters will to costs sporting by Total decreases Total Network. of at currently games television and and ESPN benefited and from and Higher programming stations costs X, ESPN just third lower and revenue, ESPN first new have advertising League Soccer half driven marketing be and on accounting the recall networks FX the The capitalized live resulted costs future the Family, the guidance of cable live Friday. lower we advertising ESPN Higher are production were production accordingly. the We programming fiscal ad the higher and expenses played in deferral second absence significantly and sales at results partially due lower costs. of and year that production and League of broadcasting that the Modern to by programming. the Several At the lower the lower to in may owned a be Networks XX, benefited by down during to the titles quarter, the and in we quarter our rights programming including in was and in said Baseball programming quarter largely this expenses the ESPN, incurred rights You and were while to amortized. half for these COVID-XX expect sports as the production programming Major on last League to year, expect significant of Major primarily NBA Major increases Networks. Baseball. programming offset down revenue other due in already revenue NBA FX July due the Simpsons, returned costs driven quarter ABC NBA events to at be

planned, by the of offset which several direct-to-consumer Media the ESPN+. approximately at by associated higher of resumption NBA. with million benefit a driven points our revenue affiliate operating Networks This results rates, live to about the in segment, the sports driven continues significantly, International sales into X due week, Star launch XXrd the were expanded by to benefited of losses the by including At was growth X%. Total improved Disney+ during ACC the partially increased offset decrease expect ESPN's network. benefit of from last new points in QX, ad due Assuming as which by we third quarter, compared in subscribers higher four-point decline X a from particularly the launch $XXX of costs the to year, quarter markets and and to

launched During we August of limited in NTT as base and a strategic end of Japan with subscriber the million, our in DOCOMO. partnership now of a quarter, Canal+, the XX.X France, which service, At launch in to had Disney+ X. Hotstar via India the Bob third XX.X grown with as Disney+ via Disney+ million paid has mentioned, quarter, the

of our our of Given Hotstar quarter-end about the subscribers. India unique Disney+ comprised it's noting XX% that offering, worth nature

to ARPU. this As quarter was Disney+'s it relates ARPU overall $X.XX.

results improved in in adverse an to our $X.XX. Results growth operating Premier impairment the quarter, approximately coming to contributed third direct-to-consumer we shift the and than was expenses reflect segment in excluding at drivers However, in segment at expected for prior reflect international these of income the in as of year absence services aired prior-year included by the operating about our which quarters This provided subscriber the that which Cup quarter reflect international per increase future prior loss costs Star, in DTCI push earnings a declines than charges primarily rights third lower charges results advertising programming $XXX lower due of calculation we as the quarter MVPD expect reported and is pay-per-view Both Disney+ had These which last base. businesses of cricket along into streaming at offset excluded the in Indian in direct-to-consumer guidance recognized approximately $XXX our overall costs, the quarter. higher lower-than-expected outperformance, underperformance better to to of League an million than due to in channels assets better costs which impact Hulu. as for subscriber At our our million be at our channels, on it the Hotstar, COVID-XX with came our business, in our the well results midst of UFC in year-over-year including the accelerated billion related and impact results revenue. of Disney+ change of share. partially the of the impairment due income. quadrennial of operating the ICC versus to these Note better $X international quarter World ESPN+ guidance. segment's absence

Additional shortly. be we XX-Q, details to file our can in which found expect

driven stake Hulu quarter. $XXX and total And excluding international segment businesses we in contributed at million income $X.X operating our inter-segment We operating the businesses operating third and in acquired, continued and resulted ESPN+ in QX losses billion Disney+. operating approximately the the losses to approximately to inter-segment prior-year fourth segment contribution in a by the eliminations quarter. in partially our of netting The segment by operating to Hulu Hulu's of net investment relative about of out in offset expect improve losses by about DTC million we our results positive lower quarter, million. direct-to-consumer Consolidating and $XXX XXCF's income for to generate expect to XXCF $XXX eliminations,

We issuing during outflows businesses of We highly While quarter have liquidity. our at our and are quarter. well by affected we commercial the continue some by the growth on focused attractive billion continue cash quarter to laser with through paper billion we billion we in our capital May uncertainty of reduced of $XX remain our And the this debt and the businesses. term $XX rate. navigate to in of $X reopened, long-term feel managing further preserving our positioned in future position cash during ended strengthened prudently to time balances close invest and to

a items you update give look we handful on. like to we that of As are ahead, there an would

may a actually Products. you extra current seeing has worth net upside occurring loss XXXX operating at expectations At adverse surge due than World finals, MLB given Products. positive we week, recall an It's modest that year, IPL that while and calendar in operating have the less First, operations. in originally This Experiences, our Parks, all of week and modest contribution recent a Parks, expect impact operating and NBA Walt we QX are our to is reopening that Experiences, addition Disney games playoffs on we results will fiscal cases some in in of had XXrd week noting is to the Florida. level, the at expected COVID-XX in XXrd

Consumer anticipate our business a also Frozen retail Star sales caused prior-year to reflect as QX difficult of the and COVID-XX. results will well the merchandise operations ongoing Wars as quarter at disruption We by in comparison Products

for proud and well beyond above going of very our team Lowell to would we expect position spending to And members These fiscal XXXX call prior now that, to management lower and refine be a turn we over capital at due CapEx the domestic plan resorts. million and fluid and Finally, than year, spending be for parks have largely total our future. we our I'll we certainly to are exciting to and our happy continued and take company $XXX times lower approximately cast with questions. your to are for

Lowell Singer

together questions first that, do Christine. we and afternoon, ready by as me the with note not your Daniel, the my will executive, Q&A, this that to I transition physically for we best are question. let Thanks, we to directing And are the Okay. to since moderate appropriate


Alexia from first with Quadrani comes question JPMorgan. [Operator Instructions] Our

Your line open. now is

Alexia Quadrani

questions. two have I

and is the parks. first second the the one studio on The one

you think the common kind Black studio, do the Or color mean, know, Disney? films, big eating think is moving I we direct-to-consumer tentpole I accretive sort you of of one-off? guess for to be more a a the any should on going how occurrence of is later the of opening how On is then the guess away I in on Walt in parks. about World losses Widow And the fall? parks, much Disney Mulan

you of maybe said. eating would or you it of that surge. think the thought demand would because accretive of lower be be Corona. Thank I Christine, it's the you're you because to surge isn't initially careful away thought less as it it's than keep I'm or as curious just because you. to and that because having strong more capacity

Lowell Singer

Bob, then thanks. why the question you we'll and - first take with studio Alexia, we get one. let's why question, don't start Okay, the to don't parks

Bob Chapek

unfortunately several pleased very move consumer theatrical be had waiting long to our to as to time are we've dates for for bring to able long, a We our times. Mulan base been it has

it that are We bring platforms. to own opportunity our direct-to-consumer fortunate we the to have

consumers to So we're can to at. that some business enjoy window looking looking one-off terms opposed as at But we're a say we Mulan new say as trying model there that of, is in it.

that get said, to access able get we that Disney+ that that one-off. we learn offering, interesting offering. but So take on That number the offering premier from on the price what we transactions platform subscribers Mulan PVOD happens uptake at consumers to not see and find the to is of and a of it very it the only platform, on in a of new be number $XX.XX terms actual the of our

Lowell Singer

Christine, in some And on to then speak parks question, demand, the Bob, then jump numbers. of could want the on and maybe you to

Bob Chapek

a travelers from our guidelines to are would Walt tell opening we we obviously some what was struck demand us, stream were then give trepidation the level who jumping highly that Yes, travel, this six-foot go gave all park started weeks This we of and the anxious time park World. unfortunately and going flying ample is opened had distancing social about we announced six the long before plane to could reservation to the on numbers when up. we COVID a again and that and uncertain Disney distance above

seen make So level the from of from disease a the traveling base does is have We've state. necessarily might reservation but other and because XX% of had a markets distance, XX% ebbs what coming our also as cancellations a we've that flows, still once higher-than-expected local and roughly they in guest somebody cancel. we

optimistic time, about but happy responsibly. confidence at returns, and so first while what I our just research very contribution, sort should that, we've yielding social the indicates So we was that distancing, sure local travelers. that - consumer annual day once very returning from every operating very is used positive close long the in Christine of done as and and our the we're some and that said, holders place, our bookings of for indicate pretty our we've same we're can percentage fall-off maintain seen say that still park we're strategy the goal the a that fill that will to that we replaced be net shape the and that make we're in pass distance good because with we of the necessarily

Christine McCarthy

we contribution. what context revenue the Alexia, be into opening as not a net we're that last that we I'll variable put referring could little exceeded we believe park On call, Bob opening that after to a a would shortly unless costs. positive earnings mentioned our generate

been mention expected, in the to as said, net we're the as are that the positive of situation So current because a also contribution Florida, like high pick demand but Shanghai we now, is net abates, we do still as positive well. it in to And extent COVID it's right lesser contribution I'd that to that, as in we expect to although not operating area we had able as up. has level. But consistently


Stanley. question Swinburne comes next with Our from Morgan Ben

is open. now Your line

Ben Swinburne

under earlier the that's I'm Hulu. Disney+ I'm is haven't offering sure just a about forget I idea to subscription deployment, approach a and tell think general that you sort interesting. think of globally bit there we at us, 'XX strategy more from a Star obviously research interesting could kind pay-per-view ask wanted that if the just us strategy, of if an DTC for which Mulan in were big there's the content that versus of forward surprise twist lot an subscription? strategy is platform? just on of brand part is wondering Disney+ the you your a the Thank this the expecting, news. tells of seen about entertainment second, because launch, direct-to-consumer, an can is a but it, access moving you're that And anything calendar top I'm as Day huge versus for what following about you're basis you along really you. sense interesting but on a about it on than your case wondering a international then of although a I about looking doing which of as the offering with a using thinking on you're element service give regular wondering coming We in I'm Investor terms I not what

Lowell Singer

Bob. Ben, turn questions, and the for to over Thanks those I'll

Bob Chapek

market is course own successful Disney+ we then Disney+ of already in technical very our successful and using also it a own it terms rooting content brand want which platform, in close it general internationally, the we to distributing of a to already Star that Disney. association bringing to we entertainment strategy In that mirror by offering and under international

that will Freeform, we aggregates name, terms Searchlight, I going isn't own third-party that from also, first studios, thing ABC Fox will in any a rooted and under awareness have on XXth into look nor the content FX, this and I not. outside have market, I be licensed your in this in and does is launched the think being being Hulu TV, differences say This it our Hulu content of surprised U.S. must to and at it's content Hulu where internationally. important different the brand to no the plan how think been that's century, has of brand

synergies this under ability with the So market and platform. our existing us gives Disney umbrella to have the this

there. rationale So that's basic our

idea, we make Disney+. a we we access to not us, our an know, shows thought offering, a such give us original about be window but that almost offering as theatrical acts get expect large than the to revenue only give that also for say research expensive again to sign can anything under a whether order that that new us to have that because we've try news, premier to probably the sense. see establish up it a PVOD produce and access from get it that a is we - when the into I and offering from premier quality and window the my you the blockbuster frankly tentpole in own some your would you of makes comments, from platform, rather and the chance try as investment of a All Disney to films going is terms and got free premier to we opening as learn from to that simply that test have good expect we're can consumers mentioned transaction gets in access it we stimulus recapture from to quality fairly rolling this a would In thought to I'll fairly


from comes next Bank question with Reif America. Our Jessica of Ehrlich

line is now Your open.

Jessica Reif Ehrlich

of questions. A couple

do Disney always exceeded the which the hoping production? national so maybe the current could to of plan stuff synergy, in haven't us how very there has not. back about get work to kind guidance, production, you was on been if updates that you on up. will that? If given on the can prioritize but to getting was on obviously low-end just your you've market. how about the provide a mean other First, sooner enthusiastic in your original on update break-even you within of and the what that of branded $X of us think who Japan, could Fox ramp, said you - place? will about mean percent talk go outlook, the five-year on cost past. could new on Will be I a insurance your reaching protocols, you Disney+, And you give then And give some you billion color or anything past the then specifically some I Disney+, complication or on any us just moving there I costs much Fox, color with But you've will and you there's just expect bearing

Lowell Singer

it's you. hear right, All to from good Jessica,

to get will try as we can. We questions to as of many your

So synergies. Christine, let's Japan start with Jessica's question about and Disney+ guidance, and

that with start Let's group.

Christine McCarthy

I We'll order. all in sequential can these remember see if

piecemeal, of process the plan, going few long-term a from now Day we the calendar of So Investor at original upcoming little you just our give typical Investor working but a disruption not we're on bit update are going to full update updating schedule, the we because a and it's months. Day delayed in business, our guidance do to of when we're all to we guidance, the through COVID a the in provided

- review are because can call the a momentum was full was - than NTT have you launched here. a it subscriber obviously into you Japan for that with better to to wasn't that in launch, Japan, an it I Disney+ in and what have ability. looking So growing DOCOMO alliance XX NTT an not on and guidance exclusive would it we're provide fulsome hear things expect gone of now be so DOCOMO, we and order to had June a expected limited On

looking be shouldn't you So a country at full launch. that

because in affinity for brand absolutely you high think market, will I So Japan. very, launched, it in be very is there that can you're demand the for a that once there is Disney+ anticipate right, Disney more

you question I also think on had synergies. a Fox

we're originally and is despite that COVID, that are track discussed we proceeding achieve along. going had the Even We still still synergies to on

Lowell Singer

want do question And one? just a production well. you restarting then Christine, to as that take got about

Christine McCarthy

that comments, and Sure. incur the everything $X I said of it's we billion that costs a my now things, that's would from between fiscal In around of variety and 'XX prepared to on. that stage site the testing preparation, up imagine have productions they can preparation, to has from productions, go and have distancing you for, accommodate all everything these you ramping of end

lot costs increased result produce increased So of to there's episodes. in those also and what is will a days

all those will costs. So things incur of

productions safety Many amortized put to achieve costs you've also is and are be As and will in future those we costs parks, largely be and as heard parks. considerable those in related And those will us, I measures mentioned, been health are there from to in that the place capitalizing that have periods. of expensed in


Hodulik question comes with UBS. John next from Our

now Your line is open.

John Hodulik

Just quick maybe ones. two

then need and immediate I but to any not allocation that to although suspended you've strong you especially that? as international stance Disney+ both Are have a and on that concern, aggressive look the you've of was can a last guys the lineup given thoughts can the you these confident to the the think And secondly, DXC. markets of the call, you new capital restart dividend, just the on some that fall. enough recently a Bob, got going we talk in about of of you some sort you're the halt the platform forward U.S. more new and bit on reinstating First, program sort as in production that sustain of that seen it's growth of sort and the with Thanks.

Lowell Singer

you'll production question and the Bob, the fall, take you John, question for dividend take the for Christine, thanks why the questions. don't

Bob Chapek

and that's you We've but is of such re-enter it. go altogether to October. of we've while it and and is be but be hopeful grow sustain would to coming suspect, busy and continue shortly us to production, excited course, we've this down about. us and but for one extremely we're new we're increases things excited sustain tends content we've time, to cease coming a may tell properties cases new that COVID about got developing actually in very not that that helps it's Falcon engagement Winter The Wandavision we're got, a also content that that subscribers and talked Loki, got the that beyond you to Disney+ the not again slow been we've us that Soldier about we're the enable that In announced require to into Mandalorian really, bring things had is I some of only which we've production in fabulous, you the and content about Marvel But retain content And found that X will slew catalog linear that priority during new subscribers. that and As these really about only by Marvel of going we Disney+ X, to grow some to excited coming growth

Christine? that really content it's this go that think much I new going propel once having the ahead forward. to think so business and this at I So of all

Christine McCarthy

John. Hi,

So let dividend. comments me the a of just couple make on

we we all and all COVID believe the environment uncertainty the have Board and of accept half for the with company not that and that recommended flexibility to fiscal and were that made with provided in and additional that to management dealing in with. know, seeing first been that continue deal what recommendation dividend that the you the the would As 'XX decision July in in we're was pay financial payment decided given to we're the

So half late Where be that not impacts. the 'XX latter impact second Board mitigate to calendar early are in the year, the the dividend of to COVID Board, it of the very our COVID part again, to having making typically a December, consideration. we would determine performance measures our November, on but fiscal whether or would we the we, for into to only were not declare recommendation financial and what take going are with it's and taking

only and full that So to our principles, and are believe with we'll with into you're of Entertainment foremost, are consideration we but shareholder internationally we're going internationally and not with take doing businesses Disney+, General the drive going now the channel. direct-to-consumer overall what value, part in capital the financial in seeing we it allocation Disney+ picture domestically and long-term to first invest is initiatives,

other the end like the but of list, dividend, feel the year. to the like recommendation that's end certainly decision measures top are a we looking or won't the that but of also at of the until close calendar So Board we to we make


Our with next question from comes MoffettNathanson. Nathanson Michael

Your now line is open.

Michael Nathanson

fees worked those don't about sports in hybrid in So us the are on a those to anything and if think risk have football what being about you is about and bubble generally is, just that's pro One think U.S., talk get fees this help template seasons two new maybe I the there ESPN on your the football that affiliate rollout and college how or to risk months next you six is a wondered Lowell. a that and AVOD/SVOD not just in bubble globally? to in bit you the I so. then concerned the And about for channel, not completed? the is of to on affiliate

Lowell Singer

Bob, Okay, take those. do you both Michael. to of thanks for the want questions.

Bob Chapek

as going that starting an going we see a Yes, terms in with strategy of Star a towards through Domino on of PVOD window eventually offering Disney+ the today, after Disney+ in announced exclusive offering perpetuity. the we this in sequential sort for of details part getting PVOD of terms the some be later and will live to to then on have transactional we an announced Disney+

platform. have terms the Disney+ you got ability use across the to there. of that the do say here, both a that we something afford think offerings, Star the one to we've to talked that Disney+ capability theoretically platform platform entertained, same enabled utility on if we mention we've on utility we also should in we've platforms. but It's like we not that or I do Now, can is did brand that on to a be I Star, should obviously about Star particular a itself so its got something will and able is it

that all that of have way the we covenants able with In the that. sports that that permitting really hours see the season going up League we've certain said, confident got college on feel - we feel the being right want in live possibility to Commissioners, on and going of to that think terms to with meet on partners, Fox don't the comment I us the we terms we really I the in of going reach we're we that place, terms that and of on because be that's going feel now, the our to likelihood to of in football confident

Michael Nathanson

did strategy as as just Bob, is the you AVOD/SVOD U.S.? with it Hulu the in

Bob Chapek

so we've we got to Disney+ do that we Yes, to itself, got now. on no plans similar planned that, no Star have but got AVOD/SVOD we've chose we've capabilities to if well, as but ever do obviously


Our with next question comes from Jason Citi. Bazinet

now open. line Your is

Jason Bazinet

in recognize a always are the and the terms you with in love said could a latest under excessive you guys it on the cash of terms seems of capital $XX cost sheet, was most billion scenarios debt capital sits is conservative dire I that of even the but free anticipate. low you that raise, balance cash it burn,

thinking Thanks. you little of can behind might just for? used behind your explain bit a it that maybe capital So quantum be and what

Lowell Singer

for thanks question. you take want Okay. the Jason, that. Christine, to

Christine McCarthy

Sure. Thanks, Jason.

conservative able we also interest was We pretty any some but do have did right. and You're approach long somewhat it a going continue. this in to and not take to to of managing into we March was environment achieve visibility liquidity we back favorable rates when how were April, money, that raise

the saw in weeks consistent capital when weren't some spring they markets also We conditions.

much And just is been the that while, have look have is mitigation as in parks, bringing our a them we XXX,XXX anticipated. we done, people that job businesses. few on towards aligned whole are over remember that. at belt. the great one up company probably back. we And furloughed a now, the better The cost I But to continuing a of the some we we it it decided that we when gapped But and have you'd somewhat insurance for as view we an when we overall the it but one and there high demand they take sometimes policy. because see sheet, at COVID balance the the, weeks it so we was out, tighten when because think, is than things opening tightening we have and So can and get position took we're we spreads way we've happened up

back. are For yet, the all not part, but are a most back lot

just third we spending labor money be did of quarter. terms will we than the in So in more

resume our costs our quarter of in So fourth businesses. some some see to up of go the actually you'll

in the fund we of And that being obligations. a look is be at as So this not to what position never company want our CFO, to I know the of would as kills all able all as, lack I liquidity. of

Jason Bazinet

is That minority that in makes capital was not earmarked of sort perfect stake none that of of really the pulling sense, to but you own, again? part that that don't Hulu

Christine McCarthy

out that, of that's if look years. No, more a you couple at

thing this maturities So, is $X.X is memory do have and about correct. the If We debt still up. fiscal coming other we year. my have another billion

XX. fiscal think I billion $X.X ' for

to refinance. balance if just certainly we that some got have can this to go our and still don't we've we on So not repay cash that market is and debt sheet, maturities


Barclays. next Venkateshwar Kannan Our comes question from with

Your line open. now is

Kannan Venkateshwar

So I could. if couple a

this billion markets, more this charge is, as is took could First as direct-to-consumer and $X Bob a you for go mean other use potentially international broadly, question way Christine, to well. markets. pull for in you that does this I But that a the channels guess

little you've you a of when think ESPN written look at in terms down that could in secondly, then done cutting direct asset? that world so obviously And I even other bit far. where alternative companies cord accelerating consumers of but this now From the channels, a the ESPN perspective? state the is bigger said have and you some just that model become Thank you've Is cable UK at there could perspective, you. with Bob. possibility in go to markets, have your looked an given what that

Lowell Singer

to billion $X Thanks. Christine, the and questions. the charge, to ESPN. for speak thanks you you don't Kannan, speak why Bob,

Christine McCarthy

asked So I'm great glad a that's question that. and you

this can impairment. some So I around put color

accelerated with the on the frame then and the heard into COVID-XX. subscriber best that Coupled with impact a our push have, DTC in subscriber of already outside lot time underperformance and way of would the the the launch reflects the today, are decline impairment is MVPD by learned base that seeing channels I streaming you're you've a same an was we of seeing of business we've - with consumer international as it So U.S. this that, Disney+ we exacerbated and

we about all does linear channels What and things value - so those this and that's you this impairment the So intact. impairment is include add up DTC, the not we're is - XX not closed and already of primarily those down quarter closed third in channels. EMEA. calendar have this year, this were in they fiscal more have in this Most and were of APAC than in

closed India, is APAC you those and we're these going these Now, down taking taking what and I them of shutting more certainly not said, and this were parts a in say other that's when where is look at channels impairment But are into platforms behind as quickly, Asia. direct-to-consumer the in direct channels

Bob Chapek

by question, in sports first in And driver think ESPN strongest me ESPN a the interest. of let off of is brand saying that start be viewing a the sports to macro of and a live we terms continue on I level, sports, understand value

I the XXX of most over think sports and that by evidenced it's on viewed XXXX. XX the cable telecasts broadcast for fact accounted in

a really love. brand in got that a strong consumers we've a position from So standpoint market

maybe few but when the we're and talk when everything next we think and we've time, now, this question do certainly hopefully the maximize ESPN? and that little we the So and changes to then is, right way able U.S. brand, at stronger our months. of we we've as we looked our to a programs get consumers conference our looked we the to most terms for it more direct-to-consumer are proposition got we in in investor the all over a the how whether at effective options to that to consumer how bit open get any that we've shareholder in from about certainly Absolutely, value meet way can


with question Fargo. Steven last from Our comes Wells Cahall

Your line is now open.

Steven Cahall

spend on margin terms in per seeing maybe or that pricing bit I'm and occupancy on was hotels you're I that film ramp more to more Disney+ of able come at with in you next planned of guidance, not and Orlando, And contribution about help as content. Are issue up many in to expensive could some you've of had more capita you Disney+, update think with the end disruption could people to wanted or got kind Maybe towards first had. around profitability characters? more of that being getting us that parks, then as just which caused more pricing on low Bob, the sense to with the parks, clarify to in And Disney+ as growth kind it that of already like curious, you lower just well. for a that you lower? about you contribution to amazing margin Was the the in plateau get little through on can a of the pretty mean the the more this does content original be pipeline after terms focused subscribers, the of it this make in stage of market bigger slate go you've of driving and more of a Thanks. that's existing think what

Lowell Singer

Steve maybe to parks then well. may as want just you start comment metrics then Bob, you least and Christine the on about talk Disney+ at parks' want to and on

Christine McCarthy

Steve. Hi,

net the there travel that we was amount originally Disney opening because when limited a anticipated. which had Florida, that So we referring of of we talking up World contribution what inbound were surge was were Walt about COVID to in positive

travel more Disney like bit yet reopened. are it and to positive, when as is overall that into a but And more the it's hotels It's World. once dampening so there still on So there relates of occupancy Walt are not pricing a and really it patterns at going hotel, regular that sort many of pick it, again, will up local, having little is it's effect

kind And now. of numbers are so right those meaningless

we probably patterns very, say in just now, but in say been could and of for year. like I opened you they to people would calendar a staying caps as because not thing Wars are haven't Lands there for the I add people the vacations while, one - forget a demand strong the is rise more fully very well the this numbers, occupancy we the let's and the going get booking parks as see that's beginning Star that the full providing travel and in that of pent-up and resistance a would be once little per So and we'll right used the regular is normalized

So people that. who you and traveling of were in had opportunity had experience lot a an who not Floridians locally just have and to even go yet

per and the a I able been into time. great long people for get it's think quite So because our to parks a caps haven't

Bob Chapek

you business as they're is have their where on the a as depending to an who I'll in follow and of different typically pass up park guests days day in and a on terms to on is guest marginally than know, coming someone Newpark's or values who more relative beverage. from stays annual that, two food someone question different comes five travels and days stays seven and contribution consumes valuable less for and and to the merchandise

constituency look So like occupancy change, a that. in think bit, And anything but it Christine do hotels. the changes our at because it's just and reductions way I or of that overall as it's would price I margins handled is not their little the so pricing

we the as to Disney+ are after to than of On bigger the absolutely we of try thought. get sooner market number going to a number a subscribers much over opposed profitability to rotating

very invest as us and our keep we going. machine goals do plan must in our Although content the are say encouraging, more to hitting is what as we prospect cranked quickly of that I order is even to in but

I is that acquisition in tentpoile new the subscriber mentioned, content. in you the bring biggest having new one things As content and of hot making of terms get investments to to service by

be standpoint base installed and trying first both from we'll a grow to a So, investing from content service marketing in the and then standpoint.

Lowell Singer

to website. measures questions GAAP us thanks measures today. referred we again to our can Relations Note reconciliation be that this everyone for of that Investor our on for the thanks call Steve, joining on equivalent found and non-GAAP

beliefs laws. expectations, about this basis you and on securities assumptions performance the views plans, call, not statements future or business financial at statements may constitute obligation under the remind also we the me Let make events and on certain We estimates our that statements statements statements. forward-looking update including or our to make regarding these do these business time any undertake we them of and prospects,

and uncertainties on are expressed factors, factors Report a materially to and us XX-K, everyone including of variety the with great XX-Q results rest joining Annual of number differ in our in risks other and our call. quarterly Thanks Form a of today's filings statements reports Securities may or Form Commission. in contained Exchange have our results subject on day. from actual implied a for and and again light the concludes This of the Forward-looking


Ladies and for you gentlemen, call. concludes this today's Thank conference participating.

You may now disconnect.