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Walt Disney Co (The) (DIS)

Participants
Lowell Singer Senior Vice President of Investor Relations
Bob Chapek Chief Executive Officer
Christine McCarthy Senior Executive Vice President & Chief Financial Officer
Ben Swinburne Morgan Stanley
Michael Nathanson MoffettNathanson
Alexia Quadrani JPMorgan
John Hodulik UBS
Jessica Reif Ehrlich Bank of America Securities
Doug Mitchelson Credit Suisse
Jason Bazinet Citi
Brett Feldman Goldman Sachs
Michael Morris Guggenheim
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Walt Disney Company's First Quarter 2021 Financial Results Conference call. At this time, all participants are in a listen-only mode. [Operator Instructions] After the presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference may be recorded. to Singer, conference Investor Senior like host to Relations. now Lowell today, Vice would hand over the your I President of Please go ahead.

Lowell Singer

quarter welcome Disney and The XXXX first afternoon, earnings Good call. to Company's Walt

on homes. and you was website. release your We to today we call minutes is www.disney.com/investors. about Our are will once us again our being also from press at, webcast issued website also our of still transcript are ago joining realize XX today's And and most available a remotely. call is posted Today's be hosting

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

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

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

Bob Chapek

Thanks, communities all present everyone. and the safe. many COVID Lowell, and staying know, you're way on and as to globally. lives. pandemic a most continues it I too businesses well across hope, Unfortunately, for has doing you taken the important, tragic US toll, And hurdles, hello significant and

company. vaccine one which of Southern doses been providing Fortunately, availability with pandemic, space at the continues part, a hard to pleased to year vaccine. To-date Disneyland doing And impact, developments, have we're at for particularly believe been more the our have negatively some than operations nearly start to major the has XXX,XXX administered, by location. encouraging our of of It's California's be there distribution the passed, sites. our of the since

about a will was to EPS the quarter, a first quarter share talk our share, year. quarter. for $X.XX adjusted the last For results Christine $X.XX more in-depth, the compared in

general available tile. to And will easy Fox, Century markets. into Disney+, brand ESPN+ a amongst distinct excitement to will seeing of And legacy of thousands a to But acquisition ongoing we're of significant Star. the face time innovative offering course we and really team for be finding challenges, deliberate programming, more our the even We've consumers. company's from also controls chartered pivot, parental entertainment to launch. time, have distribution at our February hours from aggressive fiscal XX.X new businesses. multitude DTC During our and platforms. in of million across parks and conduct of the on reorganization Canada, has how the a especially performed, and the creatively, well, studios, originals first while we and the us proud enabled direct-to-consumer changes, and for streaming with multiple XXst as integrated XX.X exclusive experiences, Hulu our on business will services. subscriptions, further specific to company's and our Star, Australia, have manage television quarter. end performed Star ESPN+, of be will over away less has tailored local launch along And same content this Singapore. respectively. success of highest of international Star-branded million access a push an weeks launching Star difficult our offer just and made our even I'm we two and new and Disney+, pleased subscribers, the well ways both, model year and with and XXrd, our New of has Hulu as in DTC-first towards sixth across have and business. content accelerate with Zealand since Europe, expectations, grow tremendous We're with And exceeded including use, recent movies than offer to the Disney+ DTC strategic from our been a XX.X million Star. its

content we've production, in got during of As Investor for full saw streaming services. of our presentation, original Day development amazing and pipeline you our an portfolio robust

The teams our string In delivered We the of including and $XXX the And services. on that's to IP best months, reflected of in streaming acclaim appeal, of tremendous Disney+ and brands and business. franchises breadth programming. debuted in has million creative us just Pixar's box and which unparalleled depth and a in since artistic the for have Mandalorian at our from reveal that the an incredibly taken of of create some the own and triumph which the service nearly last wealth original on Disney+ programs, this two of two Fett the December; series incredible have WandaVision, provides surprise has with to and The mine of theatres season ended Soul, Boba will with Disney+ starting in collection Day our global storylines Marvel's Christmas fan other unrivaled hit his office. favorite characters

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Muir extraordinarily show News Good job. the difficult During Tonight morning with Morning David and local World the and absolutely one an newscast. number top amazing and teams evening News year, hold America an as doing ABC have national been to outstanding spot continue And our

and times, We're that strategic our all of the I'll business that our emerge relates actions we've ever crisis accomplished, and us a in these it proud While as confident to than and With position. to businesses more that consumer this we priority enhance over remain we're believe transform especially experience, from we it will taking challenging our are will top strong we the shareholder turn our and Christine. to to increase guest that, enable grow company expand now value. DTC

Christine McCarthy

good Thanks, afternoon Bob, everyone. and

commitment by quarter earnings financial filed first results reflect financial under of ongoing information fiscal XXXX. We the faced operate results first spite with week our segments: in will our organizational summary strength over the or with recast we quarter and circumstances are Excluding modestly versus the fiscal share certain Entertainment DMED brands is segment our and year, the I'll COVID where Disney quarter past the This organized our discussion were and businesses in last our reporting newest the operating which items, Distribution Today's our experiences efficiently. prior well Products as Experiences DPEP. an for or year. $X.XX. with per these as In Disney be Media have X-K segment increased of two to the diluted and new Parks for income we of DMED; first the start challenging structure.

domestically as channels in includes financial DMED other. income structure due domestic of decline was results networks, year costs. higher offset licensing international the timing business: our the Linear internationally. includes sales which partially and three was and lower for reporting higher at games Operating ESPN NBA to operating quarter versus due by our cable where decreased significantly results our channels, the and periods rights driven to both Our in broadcasting of impacted both largely networks; domestic at our Playoff quarter by declines cable were At and now content increase relative an as to to first at costs. This prior income largely Football business. direct-to-consumer; business by programming lines linear due College at decrease was fiscal The well

from shift compared the typically games quarter by finals year. growth viewership and to the our COVID. the a Total revenue, higher channel increased events increase ESPN partially Premier in at partially lower by domestic offset a bowl cricket decreased timing and in revenue by reflected results decrease of affiliate lower advertising quarter to first played costs quarter-to-date And due X channels, our television revenue the a in quarter stations key in due reduction costs. lower the higher offset of and due would timing Ad have quarter. by at X to results programming was included revenue were a quarter. revenue timing cancellation revenue to COVID-related in partially points pacing X-point driven these certain higher This and a due to decrease production rates sporting offset first programming broadcasting, X% X the The NBA Indian games down year advertising owned rates. average primarily of drove subscribers. political advertising to offset ESPN prior due the by Four growth quarter a due in decrease international in television an prior the the CFP of part costs college fiscal closures. in is to in increase driven At was affiliate revenue shifts At an whereas the benefit versus decline affiliate matches were in the events. advertising operating Higher by in League currently non-programming the prior domestic revenue X% occurred ABC higher and games in of at year, in network.

rights COVID-related quarter channels the results programming earnings past expense better guidance revenue, our were non-cricket of call, and timing stronger-than-expected savings. gave than advertising to last and shifts However, costs due sports international primarily in we this our

streaming direct-to-consumer direct-to-consumer operating Moving our under on to declining drove the of quarter, services year the improvement former million all $XXX at $XXX Improved prior an direct-to-consumer. results to in million of segment results versus three Last year. guided nearly our prior operating income versus structure. we by

results than that reported million higher $XXX guidance. are Our

At of Hulu partially and including year results reflects the offset the to subscriber the Hulu, the versus of under programming and was quarter relates some quarter the the improvement Disney+ intersegment first from new both better-than-expected structure. While prior due Hulu and variance outperformance reporting the Hulu in ended to pricing XX.X first of digital by markups majority higher advertising elimination our subscribers. the paid revenue with costs. production live growth, million subscribers four million financial MVPD

of subscribers Disney+, costs base. XX.X million approximately continued prior XX% subscriber QX, in subscriber loss QX. at due partially were up Disney+. was Disney+ by global the XX.X our of the Hotstar compared lower global additions subscribers net to Disney+ With Hotstar end Disney+'s their expansion additions and growth trend of with million to strong making the the higher versus subscriber a growth first driven to Turning launch paid year offset by quarter

saw our strong additions overall base November to in We Latin was Disney+'s ARPU subscriber this America. from also launch $X.XX. quarter our

Hotstar paid $X.XX. ended Disney+ Higher results million soccer growth with ESPN+ by sports excluding programming the by was at costs offset were However, driven subscribers. ESPN+ XX.X subscriber driven higher partially rights. by quarter it

all when Toy parties to intend licensing subscriber quarter we title update The compared I'll services. launch with the Experiences X, But disclosures driven in you as Given to We choose X make no our licensing SVOD year with continue results TV in our to sales, home The year at subs. numbers to results we earnings shift decrease the of Parks King theatrical by dates. we lower to performance the quarter quarter reflects year our year that releases Disney+, decreased the longer prior SVOD theatrical content income quarter Lower to due versus DMED end the may in a and consistent result worldwide hit certain to to first we in past provide the prior significant quarter. DTC Story of from TV segment. our guidance. entertainment Content, are A prior the and of other in now of was DTC Lion additional of results third and will no and entertainment the our on turn the results operating the milestones. releases compared decrease quarter. absence distribution our Frozen exhibiting significant were home Products in to Aladdin prior in

see the to impacts businesses. continue We significant COVID-XX our many across from pandemic of

revenues In pandemic While quarter, operating Parks COVID. has some fiscal Operating versus the by Products the due segment prior reduced operations first a as our Products hard resumed lost income declined to income impacted capacities. undoubtedly an closures of at we billion year operating by the been million. Experiences DPEP $X.X and and approximately to hit have and operating result loss Experiences significantly Parks of adversely $XXX estimate

end December reminder, Paris was October for two-thirds a Hong the quarter. was World were Disneyland a Disneyland the of and the opened the the cruise first quarter. of for open was about or Disneyland third all and quarter. open Kong suspended of our until Walt Shanghai As and the Resort for was Resort about for Disney Resort Disney quarter or of full closed beginning until business of

were operations trends. mentioned during At Walt the all positive maintaining earlier, Per achieved opened Our solid were with capacities, parks while from open, variable typical from during a double-digits ways that associated increase quarter exceeded costs capacity, meaning at caps the significantly periods reduced and as to Bob up the also for attendance well they resorts At into benefiting same year-over-year. incremental all as Disney average World, found net the contribution revenue that innovative were operated demand yet which QX factors seasonality still grew our COVID protocols. time, QX, team rigorous responsibly significantly underlying daily opening. as

reservation saw with in pleased current we Marvel's in release parks our be an to Spider-Man revenue, quarter, visiting an the licensed operating of over sentiment a increase are by rate around the strong. At seeing the products longer consumer in which business, time licensing game. consumer continue we of in and We of remains increase period successful our reflects domestic bookings games first the income quarter theme latest driven

challenges would our the quarter impact may we despite due As full ahead, pandemic, context to the year we items second continued around some give look certain that results. to visibility limited of or you like

First, in we benefit rights ESPN the at our by and football domestic lower other networks, will linear from of expect timing offset being costs second the quarter with sporting events college advertising partially only games and game prior National Bowl in National compares three revenue. we one year; four to This In games the was CFP game. game. CFP Championship the QX, had which Championship lower the

political Our in Academy The of quarter in prior shift the broadcasting versus advertising the business third be lower to due will Awards the impacted negatively to quarter. year, addition second to the

We improve content increased at versus be expect results partially modestly will to direct-to-consumer as to by year prior quarter improvement the the investment in offset and ESPN+ Hulu Disney+. expansion of second quarter operating the support

We expect world constraints. in will COVID-related continued to quarter and typical seasonality second headwinds the in that attendance Walt impacted headwinds by Disney addition be capacity

will able Kong quarter. is to that will be of expectation during for and Disneyland closed current the Disneyland second Our reopen quarter, Hong but hopeful be we entirety the are we Disneyland the Paris

fiscal XXXX will to I'll reduced call our over roughly corporate, to to Lowell DPEP. to your be year that, questions. expectations we investment see with fiscal now take and the refined spending. CapEx hand still at expect And and spending to Compared to increased and have happy comparable at XXXX capital we now be We in in XXXX DMED, spending expect we

Lowell Singer

your as do Christine, to moderate executive. to note appropriate And to that, we Okay. And together we this you. the afternoon, again my do ready the we're the transition let questions me not to once call physically will best that I by since thank directing Q&A. are

that So, with first the we're Liz, ready for question.

Operator

with Ben Swinburne question Morgan Our comes Stanley. from first

Ben Swinburne

how expect of sports Good games XXXX. just breakeven? you but Thanks. fiscal that wondering capacity XXXX this mentioned us strong to know just visibility is But done Thank back for maybe us as limits technology wondering parks been rights fiscal about think to -- year? are there you And on is increase In I things dollars through these us of you annual you that think was you Christine the the I think help two can you there's so able tell cost about can to are be demand. fulfil And to the there way you've big you the the years. Christine, particular, underlying or then help ramp rest much help do, a demand? us afternoon. any and for both. between side that, And if think do number can an that basis. the Bob the about company. in movement There's any in about obviously, on way I'm can versus you, limited,

Lowell Singer

you. Thank Ben. Okay,

Bob, on So to don't why parks we'll and the Christine question go you rights. take then sports about first

Bob Chapek

Okay.

the In That rest of the and the open limited capacity the parks currently really to seems by that have to it of or under order it's lever increase to are parks outlook for we closed. of the like vaccination going the for the up currently can year us rate determined be and that public. that terms the capacity, of either are biggest in the take parks

of sort gating if is that So factor the you will.

very very, with undertaken at of assurances in to happening our that that pandemic, terms people we're demand give think As our come parks. pleased we impression made for pretty consumer in measures to ample terms and bookings. that's a guests with future in of Christine they seeing families. that And parks our prospective we've bring suggested, safety on the should and big everything their Despite what base I we've have we're

situation supply per Christine operating, in that given has than add mention ultimate we've assuming has said that have and I double-digit sort regardless the to technical think to substantially to the also got operating out with to all increase our our Disney the only Shanghai are where measures yield you ways the that important place, I things, of caps, situation that had is the our match conditions are referenced couple the have the of which this variable same increase some contribution parks, safety of like but enough last didn't increased savings supply. add cost if situation our our that's We've what they we've of same has caps capacity terms not that to of our, not parks positive think have of and of But world this able I net time World in in In our demand. and across they're we've Walt the industrial under, it's we enabled to right-size, that also engineering figured for us side. this to evidenced side -- manage those at greater I you by attendance. cost cost in had would is fixed the per years this, what will, there only terms at learned been side demand you will, how our what's where fortunate but been happening. ultimate to exceeded base, out cost -- if of And base team business. think And Christine

World. some on cost of play those also side. results working at we're So you not only on see And Walt side, the Disney think working at but the I revenue

Ben Swinburne

Got it.

Christine McCarthy

Okay. Ben. Hi,

the two of rights delays you'll happened sports doubling year. as some cancellations assuming of have continues fiscal because we shifting the some of XXXX this see address Things finals, sports of years, events, for what with between like in not but up rights will sporting NBA fiscal some the and you to expect. Now season only

costs, also Masters, in you shifted two doubling up, be up because at into things because rights soccer we rights also year. When But, out. of this expect on some XXXX the fiscal two additional nothing significantly seasons drastically can sports in And look assumes earlier our most like is You'll XXXX. overall and to fiscal we ESPN+ the the that acquired games. linear. are that have rights, And we of that's announced those shifting IPL all last

Ben Swinburne

both. Thank you,

Lowell Singer

please. for the next Ben. Thanks question, Okay,

Operator

Our next question comes MoffettNathanson. from Michael with Nathanson

Michael Nathanson

have I takeaways is right model cricket on versus important what on all. been you the released to maybe two in And when the there and season churn being there? GTC what's from learnings to for And secondly then you? Thanks. in Soul experienced Mulan. there? risk adoption is directly One Any the end? And a the growth Hotstar, Thanks. has of how IPL comes an the

Lowell Singer

Okay.

Bob, you then, the take So, want to might question? you the want take Christine, Soul question. And do to Hotstar

Bob Chapek

Okay.

business go were out absolutely of to and you given on a took terms consistently Christmas that marketplace. put terms and how going titles thought into for Day, consumer fact acquisition In DTC our thing ahead We in and terms the and by do was that retention. base as what of and Soul, brought talked in thrilled remember, we our business it subscriber our we're have our nice we we out flexible both really about of holiday that remaining to to base, the the given the

it say, would with big I was subscriber base. our so, hit And a

the that I In it Mulan that, about was I of thing is think we're terms to best Mulan, that say the successful Raya. can strategy also on extent using

whether with and cases, So case in to that something some though, going another same dependent, that for what Premier or And them some we as we to exploration our with the need in in talked we are take be some particular films those we'll whether guests, Disney in put on with use on Access is our is Mulan. the and plus direct take we point Raya it take theatrically, service. of something about and the Access in individual Premier theatrical. titles data slate was think case we'll the as of could It's that the to theatrically date decisions we'll films future, them service this

what it's they flexibility get that information given our over we're what guests about and from steer going prefer. base our decision-making really to on we our So and time, subscriber

Michael Nathanson

which want Anything Okay. a date? second, And date? release a to still can I on Widow, potential I May just that Black release think quick share on you for follow-up is to changes

Bob Chapek

Right.

revisited. I'm we So very is be carefully and a we theatres watching go at strategy But are go needs of continue going see we made to release watching flexibility, word desire again, of to we'll to be Black release a going Widow very to the to that be theatrical of to back be it the in are consumer theatrical the release. a carefully. terms had intending and the to But, with theatres, to the was because going reference conference the to that on theatrical back still sentiment strategy and be reopening whether now very, to as investor

Michael Nathanson

Okay. Thanks.

Christine McCarthy

Okay. going address season IPL with churn Disney+ up. on Hotstar, question And finishing regarding the the to I'm

So context, like also programming Hotstar. put other a cricket important lot view. part diversified at is has It a to it a just local consumers of in of content very to strategy that Disney+

one-year So we going did also month-to-month. the economical a IPL see for for we've versus consumer made sign a to up bump subscription up it a started. when season But

of it's that So those just could churn that cricket. one IPL, and looking the from programming but are offering things the we're utilizing at diversified more some in a terms of to expect than mitigate

Michael Nathanson

you. Thank

Lowell Singer

All Operator, please. next Michael, thank right. you. question,

Operator

next question with JPMorgan. from comes Alexia Quadrani Our

Alexia Quadrani

you. Thank

obviously you necessarily And on believe, And just some more content up content? and are then, Not saw general on comments number broader about growth content front for thinking commentary following local Disney+, you discuss, on of outsized a Disney for of that versus of, Indonesia, is, there. we my a local just up launch sort And price about I partnerships mix partnerships going it you leaned should think in sort in I'm Just the maybe but maybe, on question that On can of churn. following into in please curious, churn, colour churn about some traditional how sort lot comments. looking maybe in forward? your general, increase? second upcoming more about how for Disney+? those in you

Lowell Singer

thanks. Okay. Alexia,

Christine, So, Bob, can then, And a bit churn. talk talk do partnership? a you want about little about little local you bit to

Bob Chapek

Okay.

about are our talk things was percentage first, well. including local some any as for the element requirements -- the as given about And local I'll of Indonesia. talk There's total. two well, amount of So I'm in partnership really side, of content to that's content -- a side there the in local terms gate content going in because a that cases local content, of it market, there

So that ramping our And a into for is one as of what factor pretty suspect, it. territories. we're second you need that from of think we portfolio content. plays production And we overall our aggressively up one standpoint then, all might all local is

in with bear, in given audience us also and to but to there a from partnering standpoint bundling we're particular and be the what will promotional the segments economy is marketplace we giving marketing a get. may partnerships, lot promotional of market only the data the we're that's that not sort overall at exposure possibly able standpoint and which otherwise a respectable Indonesia, rates terms plan is, the have that Telkomsel with of, In keeping place we of not and them doing

-- overall are in going of churn So and that take to you Christine? one terms

Lowell Singer

will. Christine Yes.

Christine McCarthy

Yes.

so our on are we what content So in our subscriber rates far matures And we churn. the seen base becomes see and level of continue to general, service we've as our the offering into pleased decline. and more more to tenured, expect very we product put churn with

related the subscribers. paid have promotion going become conversion XXXX, launch from from of to the So in to last the specific Verizon the regard November with that numbers there churn the anniversary really happy we seen we're to promotion

relationship that consumers We expecting. offering. But know price the increase that we're very also price-value have and we're with they're that comfortable about

$X And we offers that think consumers. value attractive to our we pricing and future that will current increase well-received. believe be So the

to about we we So but always want are good improve. really where we feel

Alexia Quadrani

Thank you.

Lowell Singer

Thank Alexia. Operator, next you. question please. Okay,

Operator

comes question Our Hodulik next John from with UBS.

John Hodulik

just guys you CapEx. think $X.X year-over-year looks flat keep Thanks. Can the once to for Maybe quick Thanks. on was year-over-year can I on first to And basis? the higher on that we then mean, CapEx I be segment Okay. efficiencies, items guidance it expect a that reductions on the basis. margins one longer-term given billion It run about I get think revised in back the and we guidance. the It parks, you a capacity? cost through full like higher maybe a

Lowell Singer

then questions. Bob a And you talk Thanks do little bit Christine you for John, parks? Okay. about sure. about talk want CapEx. to bit can those a little

Bob Chapek

fairly parks. being but things year terms maybe status you've not taken terms in be of the year of only that a say introspective characterize this as fairly would in of lot that sustained to I you year a do, our of because and there's like can of challenge, last challenge a nothing make dogmatic. a growth I about also in we quo as pandemic learning what margin

things I to we think have the exceed Disneyland on prior the than and done lens we as supply. reconsidering visit. first demand we've how relative your visit have to nature and we announcements seen to all put we variety they do at park that it. expectations. pandemic recasting the of a may guest new you've of been program our know, demand wide annual guest have very the overwhelming is heresy of and recently And has Everything on Well at tough when pass like supply, depending it's to look about that we the when limits more have margins they several you

more cost essentially unfortunately with the maximizing able are be now little of a our to of piece many on be in to towards parks we if we experience, a the blank a be would bit to than how closure. reset guest able set order lens year-long of typically our we the without the might business revenue of a had up we business and paper impetus both and aggressive business pieces side So say,

a to particularly, and to be had you're about could lot Disneyland be think of of see think time some at about born. we've I those strategies So what

Christine McCarthy

Okay. And the my I job about structure. say just Parks has from perspective to an outstanding want before done talk I team addressing cost CapEx, management

costs way Of doing as business ramp-up really in really it's looked we been and they're quite they've come operations, back the at but course, impressive. will variable

what that want has said. to add Bob So to already just I

relates year. it As that last to up CapEx, to last be said we earnings from CapEx had call expected we

think now I was million. But to $XXX expecting flat. relatively be it we're the number

at couple we're spending DMED here but Parks. spending at to and of have We going corporate, We'll have is a reduced increased have dynamics.

Parks the investments of our parks infrastructure the technology, Star going is of and to that be in spending launch to are DMED some there. on we've business. like spending the closed chosen CapEx DPEP of the because slow reason at Some and the is Obviously, related things to slowing is

John Hodulik

Got you, guys. Thank it.

Lowell Singer

question. for thanks the question please. next John, Operator,

Operator

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

Jessica Reif Ehrlich

you. Thank

mean year. how sports relates both legalization in this And of of a was a on Bowl, can then factor about low fairly was to in maybe capitalize of related, conversations? for up capacity? you that years into add ABC days with the for on how growing attendance Can about just Like few leverage talk you that the but factor you I light And betting how in ESPN+? these and sports XX you CBS down general viewership you NFL? and one the of Super your Given lot. much second, of does about year it's Parks how and streaming capacity to is back kind ESPN adoption last the a talk a think and conversations then And how will to only betting.

way any that can you there is frame So relationship.

If attendance? XX% of XX% is don't know you I that allow capacity

Lowell Singer

Okay.

Bob with to But turn question. So Bob over I'll Parks question take to Jessica I'm going you. sports and maybe the the let Christine start will it

Bob Chapek

Okay.

ESPN a whenever at we rights is So look I'll forward. take always consideration the going sports.

more looking ESPN Super as of prospects of own the our service. them true than viewership, that's Bowl Super obviously, something long-term going conversations with sports and we're MVPD into we're of DTC considering down one the the rights any Bowl universe terms but more trends we're at being In important and potentially a

we lot be that is that. mix accretive it have seeing value, shareholder for deal, all But taking a if standpoint be we will a and and I there long marketplace. look that lot makes but whether our first will in certainly account a is into at moving will What with we've entertain So elements forward. there's relationship in trends of that deal shareholder the NFL filter it's a that a if going our that and say to sense will the had of we're parts the

terms of sports betting. In

find. you of younger, some around is As we that sports betting. attractive particularly very programming already probably to audience know on sports we It the have passionate subject the ESPN

of links not on. with obviously. we're future. with DraftKings of So We've got their both in got offerings. different those, important an working variety we've piece We've of through the also with that branded Disney relationships studio own We've got entertaining sports and or that ESPN Las with But Caesars Vegas Caesars. we're what it's we're betting got a doing. sports a branded links things And for --

brand to So we're sense. elasticity obviously taking some relationships sports betting and do the of we endeavors. we in parties We've and makes bumpers terms the But such both is our interested taking in what realize have highly value participating in the terms next in them think us with if own that that that. of we own got our in level

Christine McCarthy

address at the your capacity question I'll Jessica. about Okay. parks.

parks we the Especially to entries. holiday additional to fills we be there periods and right, where can't just But days. that have park for more tend Those up accommodate people. absolutely quickly are that You're said. our shut being days

as less that World XX% operating that has XX% a but capacity. we the social We maintain started efficient engineering industrial COVID. all we us to possible of are And full that park utilize and the be especially we operating the that -- out currently really in have in and already park, the Disney around. to think figured I way get at mentioned, moving started teams a level protocols at to distancing as for than was opening, The Bob still people -- the when just up it at remember, allows of for XX% Walt as you'll

say think parks, you I'd caps when and per at of looking about revenue. it's thing other attendance is, the when The combination you're a

but first to As digits fourth from quarter, also in we've I the it basis think quarter caps. said digits per that Bob's a comments It in only -- double my to had and nice we've alluded on as growth was really not year-over-year. on linked-quarter double I Q&A

they're about our caps management tend yield in they the to when when have a to have good parks. time time, have want people And and So great more think a you when per money. spend they we

refining go we're as that along. something is this we So

Jessica Reif Ehrlich

Thank Great. you.

Lowell Singer

for Jessica Operator, the please. question. thanks next question

Operator

Our Mitchelson Credit comes question next with Suisse. from Doug

Doug Mitchelson

afternoon. Good much. so Thanks

your I to So the you to streaming, about fiscal that at think calendar you'd Day be the of year launched first world year. by indicated this Disney+ end or back Analyst full

year. fiscal was it think I

to on curious, should a for I'm Thank And for How comments track XXX at you. next just content the I'm in much interested, should still been as any I'm Hotstar the is the And that homes aggressively joined? customers completed few bit have have months slate Analyst be longer Disney+ getting a service on world if Disney+. WandaVision you Disney+ think you coming of Day, And you how I to comments continuing in about forward? cadence think if many that? little So also the the watched and be do rest about we How or around they talked ramp quarters? to as a timing the going launches being for coming as any quarters? engagement hoped? use just guess, when service year, of first of third terms we content Mandalorian as that I thinking, in on would was and over piece the know, shows on about they

Lowell Singer

take you don't So, question? back Bob take cycle. will engagement streaming cadence to maybe could Christine the And you content rollout then the these and -- on of you Bob why question go

Bob Chapek

but able standpoint, of need rollout to schedule, we that. it launch all green in standpoint not It's local being of great itself also handle Okay. majority content the terms and preparation still again when on delivery year. of our only a both a the by creation service will curation acquisition from of get we from Yes, terms we content the are where and to lights our of in end on the markets the

our requires. As the a particular know, you really add make to each in it local rounds new we've which content robust of content, slew our offering quite and that fully to library of each given market and idiosyncrasies out offerings great a coming of we'll market got what for order offering

as planned. So, all it's

Christine McCarthy

WandaVision the the I with week. theatrical So we'll in titles, like along engagement every general, the library we put especially be at service something the adding overall, are as the with originals new to would pleased And service. engagement, very on when and the Doug releases Investor on we with something say, said Disney+ Day, we

So the put of schedule -- encouraging. people, the engagement once these content again, it's what for any on who time releases we know new a piece of quite is

across to time Star that's And Marvel, go Disney library well. as Live to we target getting service reach within And So We've of XXX-plus add every that Pixar, set believe week Wars, Animation, titles for our Action, content through the that we years. per course, Disney going more to cadence the continue year. on Nat as Geo. of also new we're next few we'll

Doug Mitchelson

Thank Great. much. very you

Lowell Singer

Christine. please. Thanks, Operator, Okay. next question

Operator

Our next Jason with Bazinet Citi. question comes from

Jason Bazinet

people in a masks. every have distancing And will once while, have that herd read when I herd place a even is get article that and Thanks. social anyone of in distributed. around will a the year, XXXX out that expectation we vaccine will immunity still wear and revenue once on revenues this have the to downturn question soft XXXX, I by last COVID have side saw that back buy came some parks. vaccines because suggests still the be immunity has Since just to to

of And in reason, we how and sort all that? the assuming of XXXX won't by will So, parks we that get believe or not revenues get to do the have operate that sort any you insight thinking any you're XXXX? about back economy to terms to how the counsel of fine guys is time

Lowell Singer

turn Jason. I'm going to over Thanks to Bob. that

Bob Chapek

what Yes. by will specifically I getting state XXXX, anticipate our in revenues comment to the whether world but I XXXX terms of won't you we by then. are of on the tell expectations

and some April Dr. happens this said doubt no that vaccines year. that increase Sure X-foot also there's we've in year. state believe level there overlap wearing But is for have everyone Fauci do that of and hit our And them could expectations same not. 'XX? know closed expectation. give be parks herd Absolutely reopen and social in parks. we'll that hopes the were wants we that the he be that when come that that a the we up that have by I some that But people social this until they That's for of earlier Will game accelerate to If or believe who immunity? will. mask today distancing mask distancing changer. wearing that in we our remainder back we'll the capacity We need to there the confidence of that,

Jason Bazinet

you. Thank

Bob Chapek

please. Operator, Jason. Hey thanks question next

Operator

Feldman Our comes Brett Goldman next from question with Sachs.

Brett Feldman

taking the Thanks for question.

fiscal in back So had Day, 'XX. December operating expectation to year peak and if that P&L see fiscal year than an the it Disney+ fiscal achieve go profitability much reported we Analyst your year. When DTC in losses at outlined this you this you're by better the outlook, look that I just for in the trending quarter would you like seems

we So underlying this I'm you related expected? either just of you. are better of changes curious Thank operating trends guidance do accounting that because or perhaps to than had resegmentation any revisit need to maybe the

Lowell Singer

thank the to for question. Christine. I'm Brett to that you over one turn going

Christine McCarthy

Brett. Thanks Okay.

content. cost that that drivers this not them. profitability just reach expect other very single running just into customer have of technology, growing base, change marketing, going we we are XXXX. we announced. long continuing some our high-quality profitability to We're have new that other invest biggest at a driver just includes we believe are service also timing acquiring only that We that -- for of in too losses retaining results we in this Peak Investor although business. to to and said But content which also we the right. in but and point pleased with fiscal at factor fiscal sub is are value not to expenses given subs, we We absolutely ago expected year. going the You're our Day to that We're our wasn't the to

again we to today. with fiscal sticking once -- we're XXXX that pleased are where very XXXX profitability. we're So But

Brett Feldman

ask question. a follow-up guess I if mind wouldn't you quick If

promotional to about the or into just speed you transition adjustments to are this customer you ever churn phase that you that launch question feels awareness expecting risk with engagement your and base to around maybe the or don't coming see spend first gotten be rate and year. your you anything that phases you bit connected going make or out that rate sure whether You've period any Are adjustment a the as experience that marketing bump? more and of around

Christine McCarthy

We what's believe that keeping subscribers is important. on informed about the service extremely

what So believe we the awareness brand basically is and the given that of create amount marketing we'll content reasonable the value the targeted price to subscribers. will and very of increase through marketing a mitigate

Rob Chapek

and WandaVision we to I Mandalorian jump got Boba Falcon on from franchise, I And Fett relationship. later Soldier that about well. in as from Loki. a Yes great the to this year it think a we've Winter believe just from Christine a standpoint if Wars here Star go mean and We X can moved on Mando X. we to Marvel to price-value

So a think do best high got powerhouse cranking there's franchises I to monthly the on way relationship is Thank the to no out price-value and than basis. keep very insulation releases new you. we've better regular it

Lowell Singer

question. time have we for more Operator one

Operator

from with comes of question This the line Michael Morris Guggenheim.

Michael Morris

couple A afternoon. Good guys. streaming. you, questions Thank on of

about the First, to what's therefore growing the a you? And MegaCast being front when like. looks to sort playing that you And of I your negotiating of stronger to streaming sports dynamic you couple ability Do rights, putting position a I'm of service that base what see free and Hulu, there you on able number events. this the you going monetize of content dynamic people, there, or and out? now aggressively sports. look a that's you leagues a ad-free MegaCast, rights, teams, is ability populated. one to how there relative more these services want at the you curious, more you primarily the ad-supported for mix Hulu. were maybe about are to of I Bob, the mentioned that, being -- somewhat you little been about want on the SVOD negotiating it better? your competitive economic have ask with you. question to as an in big that ad-supported share can owners approach about a And bit your benefit have I'm Or, Thank to versus Hoping subscriber ask of curious, your element deliver there provide peers? to is

Lowell Singer

the Bob from good to Mike. And I'll to I'm It's the Okay question. then, SVOD take hear let, address Hulu ask going to Christine question. MegaCast you.

Christine McCarthy

Hi, Mike.

you where we when look ad-free really more the at mix So versus that in SVOD, relative ad-supported the on is growth addressable of ad-supported. of seen And advertising. are the ad-free of the Hulu subscribers have our nice --

Hulu their that consistent, it's increase record over so versus ad-free we So, ad-supported that it we're relationship But XX-year relatively -- pretty have, of been of enjoy is like having relative -- very and tenure. we the advertising. but we much been that mix comfortable more the we ad-supported, has of actually track that that has

Bob Chapek

both a both, think on elements. multicast Yes. it's And I question,

of big I I ESPN obvious So over events proven our prospective of into partners, in different that we've the else, our as But could only I do to not also few last to to new we football with think a obvious that, nobody And element go us being multicast. think negotiations and deals. there's consumers, think in the obvious months to an what that does several but that then, consumer is benefit the broadcast. terms there's fact ways,

and rights And we're that boy, is a wrench saying, that think the that, well by think prospective times a And consumer-first throwing we the suggesting more this what probably up, I going into I we're taking owners. off be, to from the hold divide choice better there's a, that I consumer have mentality doing approach the maybe from those thing ESPN, we for very apparent we base points our ahead really only the who not a leagues number good think a do rights. but have, subscriber also of let's is and everybody, to the touch get folks go for maximize it's benefit thinking.

Michael Morris

you, Bob. Thank Great.

Lowell Singer

reconciliation can us Mike, to that thank of thanks website. joining our on GAAP were found to non-GAAP on a for Relations this measures And you. Investor equivalent be measures today. referred again call, Note everyone that

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

Securities XX-K, and reports Form quarterly Exchange Commission. in Thanks our other And I statements everyone of are our materially, of may Form a XX-Q implied a and contained in in today. on Forward-looking a and again results with the light on differ number for afternoon. joining annual results from wish report filings the or risks us factors and subject Bye-bye. very actual including uncertainties, to factors variety of good expressed

Operator

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

now may disconnect. You