Walt Disney Company (The) (DIS)

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The Walt Disney Company (DIS)

F3Q09 Earnings Call

July 30, 2009 4:30 pm ET


Lowell Singer - Senior Vice President, Investor Relations

Robert A. Iger - President, Chief Executive Officer, Director

Thomas O. Staggs - Chief Financial Officer, Senior Executive Vice President


Jessica Reif-Cohen - Banc of America Merrill Lynch

Spencer Wang - Credit Suisse

Jason Bazinet - Citigroup

Doug Mitchelson - Deutsche Bank

Michael Nathanson - Sanford C. Bernstein

Benjamin Swinburne - Morgan Stanley

Anthony DiClemente - Barclays Capital

David Bank - RBC Capital Markets

David Miller - Caris & Company

Rich Greenfield - Pali Capital

Michael Morris - UBS

Mark Wienkes - Goldman Sachs



Good day, ladies and gentlemen, and welcome to the Walt Disney third quarter 2009 earnings conference call. (Operator Instructions) I would now like to turn the presentation over to your host for today’s call, Mr. Lowell Singer, Senior Vice President of Investor Relations for the Walt Disney Company.

Lowell Singer

Thank, Michelle. Good afternoon, everyone and welcome to the Walt Disney Company's third quarter 2009 earnings call. Our press release was issued a few minutes ago. It’s now available on our website. Today’s call is also being also be webcast and the webcast will also be available on our website, which is www.disney.com/investors. After the call, a replay and a transcript of today’s remarks will be available on our website.

Joining me in Burbank today are Bob Iger, Disney’s President and Chief Executive Officer; and Tom Staggs, Senior Executive Vice President and Chief Financial Officer. Bob and Tom are going to lead off with some brief comments and then we will happily take all of your questions.

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

Robert A. Iger

Thank you, Lowell and good afternoon. While the challenging global economy impacted our performance in the quarter, we remain encouraged by the relative strength of our businesses. The Disney brand continues to differentiate us in the global marketplace. Our business strategy with its emphasis on creativity, technology, and international expansion to grow shareholder value is working. And we have proven our commitment to making our operations more efficient while preserving quality. We do see signs of economic stabilization but the pace and strength of recovery remain uncertain and we are managing accordingly.

At our movie studio, UP is an artistic triumph and a big commercial success around the world with many important international markets yet to open, and we are very enthusiastic about our upcoming animated films, The Princess and the Frog and Toy Story 3. Like UP, these films embody the strengths of classic Disney movies -- solid storytelling, memorable characters, wonderful artistry, and heartfelt emotion.

And on the live action front, Disney's A Christmas Carol, Alice in Wonderland, and Prince of Persia to be amazing movies by visionary filmmakers that display great creativity with cutting edge technology.

Our media networks also performed well during the quarter, despite the tough economic environment. ESPN maintains its strong appeal across multiple platforms, solidifying its status as the number one media destination for sports fans. And Disney Channel delivered impressive ratings growth during the quarter and continues to find and develop new talent and creative franchises that benefit many of our businesses.

We are also very excited by ABC’s fall schedule with drama Flash Forward and comedy Modern Family already winning critical acclaim and potentially adding to our slate of proven hits like Dancing with the Stars, Desperate Housewives, Grey’s Anatomy, and Lost, which enters its sixth and final cliff-hanger of a season. Although its yet to conclude, we are comfortable with how this year’s advertising up-front is playing out and I’ll let Tom fill in the details.

Our parks and resorts have clearly been impacted by the weak economy. We’ve sought to sustain attendance through a number of promotions that offer great value to families and we’ve sought to reduce costs while continuing to offer an exceptional guest experience. And over 3 million people signed up to enjoy our birthday at our parks through the what will you celebrate? campaign.

I am proud of what we have been able to do, the strong levels of attendance and great guest satisfaction in our parks during this period underscore the tremendous affinity customers and consumers have for Disney.

Throughout this period, we’ve been mindful of the need to invest in our future while sticking to the strategic priorities we’ve followed over the last three years. I am pleased to say we’ve concluded an agreement to expand Hong Kong Disneyland, adding unique and compelling attractions that we believe will draw more visitors and keep them staying longer.

Work is also well underway on the expansion of Disney's California Adventure, on our two new cruise ships, and on our Hawaiian resort. We are also pursuing new opportunities. After a successful test in Chicago, ESPN is aggressively expanding local coverage to serve sports fans in several major cities, including New York, Los Angeles, and Dallas.

In Europe, ESPN has substantially enhanced its profile by purchasing rights to English and Scottish Premiere League Football matches.

Our opportunity to grow obviously extends to online platforms. We have ample evidence from both traditional and new media that people are willing to pay for quality, to pay for choice, and to pay for convenience and they are willing to pay for what they perceive as value. And we are developing services that meet these criteria using the amazing range of entertainment content we’ve created over the years.

We will continue to look for ways to substantially grow our businesses and to build long-term shareholder value, even as we manage through this downturn. And any investment we make must promote our brand strategy, add to our offerings of high quality content and experiences, and be relevant across technological platforms as well as geographical and cultural boundaries.

Read the rest of this transcript for free on seekingalpha.com