GrimGhost
Mouseketeer
- Joined
- Jun 23, 2000
- Messages
- 472
http://corporate.disney.go.com/investors/presentations/060227_transcript.pdf
I read this (Page 15) and I am wondering, am I being to paranoid in thinking that this is a realistic possibility?
Unidentified audience member:
The investment desired rate of return today is roughly twice the multiple that your stock is trading at. I'm thinking of things like the ownership of the hotels, the ownership of 50,000 acres of land sitting in the middle of the state where you have created the value. Has any consideration been given to restructuring the ownership of the real estate without in any way affecting the operation of the business?
Bob Iger - President and CEO, The Walt Disney Company
The answer is yes. We do have thousands of acres of undeveloped land in Florida. We have actually divested some. Some of it or a fair amount of it is not capable of being developed because of environmental issues. We also look to protect the experience and the control of the land around our parks which I guess you can do in part of the deal terms you might enter into if you were to divest some of it, but I don't think the opportunities are as great. Selling the hotels we've also looked at. Again there are operational issues associated with that. The experience we create in the hotels, the way we are now integrating the operation of the hotels into the operation of the theme parks themselves has increased over time. Tom, maybe you want to address it further as you have looked more carefully at some of these deals than I have, so please stand up and be heard unless you feel I've covered it.
Tom Staggs Sr. Executive Vice President and CFO, The Walt Disney Company I think one major thing is that to take the hotels and put them under separate ownership is not impossible. It involves some friction in terms of the operation of those hotels. It also would involve some friction in terms of tax, because the accessible basis on those hotels is lower than you might imagine. So again I think you said it quite well. We would never say never. To the extent that we can find a structure that we really think delivers long-term value to shareholders, we are quite open-minded. We have as yet to see the Holy Grail in that regard and its something that we need to look at on a pretty regular basis as cap rates are extremely low for that kind of asset right now.
I see the mention of "Friction" and "The experience we create in the hotels" and "the way we are now integrating the operation of the hotels into the operation of the theme parks themselves has increased over time". However, I am wondering what some others read into this.
I read this (Page 15) and I am wondering, am I being to paranoid in thinking that this is a realistic possibility?
Unidentified audience member:
The investment desired rate of return today is roughly twice the multiple that your stock is trading at. I'm thinking of things like the ownership of the hotels, the ownership of 50,000 acres of land sitting in the middle of the state where you have created the value. Has any consideration been given to restructuring the ownership of the real estate without in any way affecting the operation of the business?
Bob Iger - President and CEO, The Walt Disney Company
The answer is yes. We do have thousands of acres of undeveloped land in Florida. We have actually divested some. Some of it or a fair amount of it is not capable of being developed because of environmental issues. We also look to protect the experience and the control of the land around our parks which I guess you can do in part of the deal terms you might enter into if you were to divest some of it, but I don't think the opportunities are as great. Selling the hotels we've also looked at. Again there are operational issues associated with that. The experience we create in the hotels, the way we are now integrating the operation of the hotels into the operation of the theme parks themselves has increased over time. Tom, maybe you want to address it further as you have looked more carefully at some of these deals than I have, so please stand up and be heard unless you feel I've covered it.
Tom Staggs Sr. Executive Vice President and CFO, The Walt Disney Company I think one major thing is that to take the hotels and put them under separate ownership is not impossible. It involves some friction in terms of the operation of those hotels. It also would involve some friction in terms of tax, because the accessible basis on those hotels is lower than you might imagine. So again I think you said it quite well. We would never say never. To the extent that we can find a structure that we really think delivers long-term value to shareholders, we are quite open-minded. We have as yet to see the Holy Grail in that regard and its something that we need to look at on a pretty regular basis as cap rates are extremely low for that kind of asset right now.
I see the mention of "Friction" and "The experience we create in the hotels" and "the way we are now integrating the operation of the hotels into the operation of the theme parks themselves has increased over time". However, I am wondering what some others read into this.
