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Bob Iger talks up "Star Wars" franchise & "Frozen" sequel at Disney's annual shareholders meeting

Bob Iger talks up "Star Wars" franchise & "Frozen" sequel at Disney's annual shareholders meeting

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When Chairman and CEO Robert A. Iger took the stage Thursday at The Walt Disney Company's annual shareholders meeting in San Francisco, he was surrounded by smiling faces - from the toe-tapping, grinning Mickey Mouse on his new iWatch to nearly all of the 800-plus people gathered at The Palace of Fine Arts.

Iger said the iWatch "is going to be in the market real soon and I just have the idea that it's going to be a big hit. I have an original Mickey Mouse watch from the 1930s and I usually wear it on special occasions like this. I just love its link to Disney's heritage and the watch is a prized possession.

"But," he continued, "the symbolism of Mickey Mouse on this new device just spoke to me. ... The original watch reminds me where Disney comes from and I think this one surely reminds me of where Disney is going. It just seemed fitting to wear it here in San Francisco where creativity and innovation intersect and actually change the world."

Following his praise of the Bay Area, Iger reported Disney's fourth straight year of record results, assuring shareholders and Disney fans that there were plenty of reasons for the cheerful mood as he recapped highlights of the past year and offered a very optimistic projection for the future growth and earnings.

Disney revealed more details about its plans for the "Star Wars" franchise and announced a sequel to the studio's box-office animated juggernaut "Frozen," featuring a story idea by its directors, Jennifer Lee and Chris Buck.

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"Driven by extraordinary creativity, innovative technology and global expansion, 2014 was in fact the biggest, best year in our history," Iger said. "Our revenue was up 8 percent to $48.8 billion, our net income was up 22 percent to $7.5 billion, and our earnings per-share was up 26 percent to and $4.26.

"Total shareholder return for the year was 38 percent - almost double the 20 percent return delivered by the S&P 500 during the same period - and we also paid our 59th straight year of dividends, increasing the dividend per share by 34 percent."

He recounted a few recent highlights:

Disney's Studio Entertainment division found gold in the silver screen. With some of 2014's biggest movies, "Guardians of the Galaxy," "Big Hero 6" and others, the company surpassed $4 billion in global box office for the second year in a row.

"You know that animation is incredibly important to this company and that it has always been the very heart and soul of Disney," Iger said. "Throughout Disney's history our most successful time as a company has been when our animation is strong and thriving and that's certainly the case today. The Walt Disney Company is once again home to some of the best animation in the world with the box office and awards to prove it."

With nearly $1.3 billion in global box office, "Frozen" is the most successful animated movie in history. Disney's second- and third-most successful animated movies are "The Lion King" and "Big Hero 6."

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And, Iger proudly noted the studio recently became the first to win Oscars the same year for Best Animated Feature, "Big Hero 6," and Best Animated Short, "Feast."

More guests visited Disney's parks and resorts than ever before. The historic expansion of Fantasyland at Walt Disney World was recently completed as well as the roll out of My Magic Plus. "So far more than 10 millions guests have used our Magic Bands," Iger said, "and we're getting rave reviews."

ESPN continued to reign as the "No. 1 sports brand." The college football playoff coverage "is a perfect example of ESPN at the top of its game," Iger said, "and the 'Megacast' gave fans unprecedented access to the action, offering more than a dozen different ways to watch their teams battle it out on air, online and on just about every mobile device you can imagine.

"For the final, more than 33 million fans tuned in to see Ohio State beat Oregon for the National Championship - the largest single audience in the history of cable television," he added. "No one but ESPN could do something so big, so well."

ABC launched its "best season in recent memory and 'Good Morning America' completed another year as the No. 1 morning show." Iger said the network is "thriving with compelling programming that sets it apart, especially when it comes to reflecting the rich diversity of the world around us. ... Thanks to the winning combination of inclusion and quality, ABC is the only network to grow its audience this season."

Iger also reported that "11 separate franchises at Disney Consumer Products generated more than $1 billion each in global annual sales."

Disney Interactive achieved its first year of profitability.

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And, Disney's stock price continues to climb.

Iger noted Thursday morning that shares were trading above $105, compared to about $80 a year ago, giving the company a market cap of just about $180 billion - around $40 billion higher than it was at the 2014 shareholder meeting.

Disney is "consistently recognized as one of the world's most admired companies, respected for our product and our people, as well as our performance."

Iger noted that several thousand former servicemen and women have joined the Walt Disney family in the past few years as part of an initiative to hire more veterans. "The vets at Disney are in good company because they're among our 180,000 cast members and employees around the world who work tirelessly to tell great stories and create magic in the lives of people everyday," he said.

Iger also paid tribute to San Francisco as "a great Disney city," home to The Walt Disney Family Museum, KGO TV, some Disney Stores, Pixar "right across the bay in Emeryville. ... And LucasFilm is right across the street. So the Force is definitely with us."

That opened the door for him to talk about "Star Wars." Disney is moving quickly to reap the benefits of its $4 billion purchase of Lucasfilm in 2012.

"Star Wars: Episode VII, The Force Awakens," directed by J.J. Abrams and featuring original cast members Harrison Ford, Carrie Fisher and Mark Hamill, opens Dec. 18. After unveiling some news footage featuring Stephen Colbert and others reacting to the release of the teaser trailer, along with bits of some fan parodies, Iger said the teaser for Episode VII has been "viewed more than 150 million times and ... that response is unbelievable."

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He then talked about the future for the franchise, sharing a piece of concept art for the first standalone Star Wars movie, "Rogue One," from a script being penned by Chris Weitz ("Cinderella") and based on an idea by Oscar-winning visual effects supervisor John Knoll. "Rogue One" will be directed by Gareth Edwards and star Felicity Jones. Filming begins this summer in London and the movie will open Dec. 16, 2016.

Iger also announced that Rian Johnson will write and direct "Star Wars: Episode VIII," which will hit theaters on May 26, 2017, but offered no other details.

"So, between now and 2017, we're going to bring three Star Wars films to the world," Iger said. "It's obviously an incredibly exciting time for our company, but not just because of (Lucasfilm). We have so much to look forward to.

" ... Our studio has been setting the bar pretty high these days, too. And it only goes up from here. This is a huge year and 'Star Wars: The Force Awakens' is just one of the fantastic movies on our slate for 2015.

"Let's start with Marvel. Obviously, an incredible success story since joining Disney. The studio goes from strength to strength to strength. In fact, the five Marvel movies we've released so far have averaged almost $1 billion each in global box office and we're planning to release 11 more Marvel films in the next four years."

This year's Marvel's offerings include the second film pairing Iron Man, Captain America, Thor and The Incredible Hulk in "Avengers: Age of Ultron" on May 1. "Ant-Man," starring Paul Rudd, will hit multiplexes on July 17. Iger also mentioned the recent deal with Sony that allows Disney to bring the iconic web-slinger Spider-Man back to the Marvel cinematic universe but offered no details as to how and when that might happen.

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He said the company has high hopes for its live-action "Cinderella," which is already charming critics and delighting audiences. Iger also promoted the May 22 release of "Tomorrowland," helmed by "The Incredibles" director Brad Bird, a member of the Pixar brain trust, and starring George Clooney in his first Disney film.

And expect another great year for animation.

"When Pixar joined Disney in 2006, we were hoping to spark a creative resurgence in animation across the company and, looking at our recent stream of successes, I think we can actually say that it worked," Iger said. "Pixar has always been home to some of the most original and innovative stories in animation and we're thrilled to share two new Pixar films with the world this year."

"Inside Out," directed by Pete Docter, will be released on June 18. "The Good Dinosaur," directed by Pete Sohn and based on a story by Bob Peterson, will follow on Nov. 18.

"Last summer, I celebrated my 40th anniversary with the company and I can honestly say that I've never been prouder to be part of Disney nor have I even been more optimistic about the future of The Walt Disney Company," Iger said.

Look forward to these things:

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The 60th anniversary of Disneyland kicks off with a celebration beginning in May.

The fourth D23 Expo, for the ultimate Disney fans, will be held Aug. 14-16 in Anaheim.

An "Avatar"-themed land at Disney's Animal Kingdom will open in 2017. An artist's concept drawing shows a Jungle Cruise-like trip through the panoramas of Pandora. Iger said, "If you thought Pandora looked magical in the movie, just wait until you see Pandora in person."

Guests to Hong Kong Disneyland be getting the first true Marvel-themed attraction when The Iron Man Experience opens next year.

And, Iger also indicated "there's growing excitement about the Shanghai Disney Resort. This is the largest investment we've ever made outside of the United States and it well may be the single most creatively ambitious project that we've ever attempted. ... We're going to wrap up major construction by the end of this year and we're already planning a spectacular grand opening celebration for the spring of the next year."

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After this, the meeting moved to the business at hand, which included the election of 10 members of the Board of Directors; hiring PricewaterhouseCooper LLP as the company's independent accountants for the fiscal year ending Oct. 3, 2015; and approving an advisory resolution regarding executive compensation.

A majority of the shareholders voting by proxy followed the recommendations of the Board and rejected two proposals by shareholders: The first would have separated the CEO and chairman roles after Iger steps down. The second would have limited accelerated executive pay.

Of the 1,694,975,006 common shares of Disney stock, 87 percent (representing 1,468,276,676 common shares) had voted by proxy on or before Jan. 12 It seems few people wanted to do anything that might throw a monkeywrench into Disney's engine. The company is operating on all cylinders with lots of fuel to propel it into the future.

After the quick business session, Iger opened the floor to questions from shareholders for more than 50 minutes.

In response to a young boy named Gideon, there was an apparent tip-of-the-hand confirmation that Disney Hollywood Studios would soon be getting a new name, but Iger learned the company was not ready to reveal it.

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After a pediatric nurse and a doctor praised Disney for its stance limiting smoking in most films marketed to children but reporting that Marvel's films haven't had the same compliance rate, Iger declared that the company will "absolutely prohibit" depictions of tobacco use "across the board: Marvel, Lucas, Pixar and Disney" in all films rated PG-13 and under.

Sorry, that means no more cigars for the character of Tony Stark in the "Avengers" and "Iron Man" movies. The only exception, Iger pledged, will be in films which involve historical figures known for smoking.

Responding to a Disneyland cast member who relayed that his wife has been working as a custodian at the resort for four years but still isn't making $10 an hour, Iger said the company has already agreed to raise its minimum wage to $10 an hour by 2016.

Some of the other questions are responses:

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Despite being "blown away" by the success of a recent graphic novel series featuring Dreamfinder and Figment from Florida's Journey into Imagination, Iger said there's currently no plans to bring the characters back to Epcot.

Answering one man's questions, Iger relayed that his favorite attraction is Disneyland's Pirates of the Caribbean. He also indicated that there's room for growth at both Disneyland and Disney California Adventure and no plans to add a third gate to the Anaheim Resort anytime soon.

And Disney's new Chief Operations Officer Thomas Staggs came to Iger's rescue when Brooke, a six-year-old girl asked who was the first princess aboard a Disney Cruise Line ship. Staggs told the girl: "We couldn't chose just one, but Cinderella was certainly there."

After the meeting, I talked to Kathleen Eddy of Elk Grove and Steve Segal, both attending their first Disney shareholder event.

"I was very impressed with Bob Iger and how he handled all of the questions, especially those on major issues," Eddy said. "I also enjoyed seeing John Lasseter in person. He just seems like the nicest, most interesting person. 'Frozen Fever' was great fun and it was good to hear that 'Frozen 2' is in the works. I want to see how the standalone Star Wars film comes together, but I'm intrigued by it."

"One of the best things about it was meeting all these other like-minded Disney fans in line," she added. "I talked with some of the nicest people."

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"It was more or less what I expected," said Segal, an animator who worked on the landmark "Toy Story" and now teaches animation at a college in San Francisco. "I don't know that I'd come from Utah for a shareholders meeting in San Francisco, but I enjoyed myself.

"I thought Bob Iger was very smooth on his feet and he did a great job responding to questions from the audience," he continued. "But I also thought the guy seeking approval for the shareholder initiative on the separation of CEO and Chairman made a good case and I would have liked to learn more why Iger and the Board opposed it."

Segal was also "excited to learn that the 'Avatar'-themed land was going to become part of Animal Kingdom because that park could use a little more fantasy."

As for the questions from the children, Segal said, "I thought the kids were great, but Disney is a kid-friendly company if there was ever was one."

  • Good coverage. On the "separation of CEO and Chairman", it is a conflict of interest to have the CEO also serve as a Chairman of the Board since the Board is supposed to oversee the executives of Disney. Disney has this conflict of interest for decades. It will never be changed. It would seem like many companies have this problem, but as long as the company's stock price keeps rising, shareholders are well served (if that is the only measure).

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