Walt Disney Company (The) (DIS)

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Walt Disney (DIS)

Q4 2011 Earnings Call

November 10, 2011 5:00 pm ET

Executives

Lowell Singer - Senior Vice President of Investor Relations

James A. Rasulo - Chief Financial Officer and Senior Executive Vice President

Robert A. Iger - Chief Executive Officer, President, Director and Member of Executive Committee

Analysts

Tuna N. Amobi - S&P Equity Research

Alexia S. Quadrani - JP Morgan Chase & Co, Research Division

Douglas Creutz - Cowen and Company, LLC, Research Division

Jessica Reif Cohen - BofA Merrill Lynch, Research Division

Anthony Wible - Janney Montgomery Scott LLC, Research Division

Spencer Wang - Crédit Suisse AG, Research Division

Douglas D. Mitchelson - Deutsche Bank AG, Research Division

Jason B. Bazinet - Citigroup Inc, Research Division

Alan S. Gould - Evercore Partners Inc., Research Division

Michael Nathanson - Nomura Securities Co. Ltd., Research Division

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter and Fiscal 2011 Walt Disney Earnings Conference Call. [Operator Instructions] And now I'd like to turn the conference over to Mr. Lowell Singer, Senior Vice President of Investor Relations. Please proceed.

Lowell Singer

Okay. Thanks, everyone. Good afternoon, and welcome to the Walt Disney Company's Fourth Quarter 2011 Earnings Call. Our press release was issued about 45 minutes ago. It is available on our website at www.disney.com/investors. Today's call is also being webcast, and that webcast will be available on our website as will a replay and a transcript of the call. Joining me in Burbank for today's call are Bob Iger, Disney's President and Chief Executive Officer; and Jay Rasulo, Senior Executive Vice President and Chief Financial Officer. Bob will lead off followed by Jay and then we'll be happy, of course, to take your questions.

And with that, let me turn it over to Bob, and we'll get started.

Robert A. Iger

Thanks, Lowell, and good afternoon. We're proud to report Disney posted record revenue, net income and earnings per share for the 2011 fiscal year. Our net income grew by 21% over a year ago on a 7% increase in revenue, and our earnings per share adjusted for comparability were up 23% for the year. I'm also very pleased with our fourth quarter results, which were driven by Media Networks and Parks and Resorts, with net income up 30% and revenue up 7%. Our EPS for the quarter, adjusted for comparability, grew 31% to $0.59.

Our fiscal 2011 results validate our strategic priorities and demonstrate we can grow our earnings in the near term while continuing to invest for long-term shareholder value. Given the challenging economic environment this year, I'm particularly proud of our excellent management team, which has consistently delivered on our strategy, creating high-quality content, expanding our platforms and growing our iconic brands and assets worldwide. Disney's collection of strong brands is unparalleled in the media and entertainment space in the U.S. And in 2011, we made significant progress in expanding our footprint in 3 large rapidly developing markets, Russia, China and India.

Less than 2 weeks ago, we announced the launch of a free-to-air Disney Channel in Russia that will reach 40 million households and 75% of the country's viewers with signature Disney programming and original Russian content. With a portfolio of 100 Disney Channels around the world, up from 19 a decade ago, Disney Channel serves as an anchor for our growth and is a preeminent brand builder. We're extremely excited about this opportunity in Russia.

In China, work has begun on Shanghai Disney Resort, a 963-acre site that will include Shanghai Disneyland, 2 themed hotels and a large retail dining and entertainment venue. The Shanghai Resort is a key component of our growth strategy in China.

And in India, we are in the process of acquiring the 50% equity that we don't own in UTV, one of the country's premier media and entertainment companies. Combined with UTV, we will be the leading film studio, producing both UTV and Disney-branded films, and we'll increase the number of cable and satellite channels we own from 3 to 9. The combined UTV and Disney assets will allow us to significantly grow our businesses in India.

We've made significant investments in Parks and Resorts in the last 5 years and many are coming online. Toy Story Playland just opened a great guest reaction in Paris, and we're excited about its opening in Hong Kong next week. Next year, the highly anticipated Cars Land at Disney's California Adventure and Little Mermaid at Disney World's expanded Fantasyland will be completed. Following the success of the Disney Dream earlier this year, we will launch the Disney Fantasy in Spring 2012 and our Imagineers and James Cameron are already at work on the design of our first Avatar-themed land at Walt Disney World's Animal Kingdom.

Our long-term investments in Parks and Resorts are aimed at strong returns on capital as well as strengthening and growing our product in markets we already operate in and expanding our presence globally.

Nothing illustrates our ability to create enduring quality family entertainment better than the rerelease of the Lion King in 3D. Nearly 20 years after its original premiere, it has grossed about $150 million in box office worldwide and was the #1 selling Blu-ray Disc its first week of release. Over the next 2 years, we will release 4 additional award-winning animated films in 3D, Beauty and the Beast, Little Mermaid, Monsters, Inc. and Finding Nemo, and introduce a whole new generation of families to these hallmark theatrical events.

In fiscal 2011, Pirates of the Caribbean: On Stranger Tides, the fourth film in our extremely successful franchise, earned more than $1 billion in global box office, 1 of only 10 films to have done so. And we're in early development for another Pirates sequel.

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