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CNBC EXCLUSIVE: CNBC TRANSCRIPT: DISNEY’S BOB IGER SPEAKS WITH CNBC’S JULIA BOORSTIN TODAY

When: Today, Tuesday, February 6, 2018

Where: CNBC's "Closing Bell"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Disney Chairman and CEO Bob Iger and CNBC's Julia Boorstin on CNBC's "Closing Bell" (M-F 3PM-5PM) today, Tuesday, February 6. Following is a link to video from the interview on CNBC.com: https://www.cnbc.com/video/2018/02/06/disney-ceo-young-people-are-subscribing-to-traditional-cheaper-cable-packages.html?play=1.

All references must be sourced to CNBC.

KELLY EVANS: ALRIGHT, BERTHA, THANK YOU. BERTHA COOMBS FOR US. WE HAD A LOT OF EARNINGS AS I SAID COMING DOWN THE PIKE. DISNEY'S RESULTS ARE OUT NOW. LET'S HEAD STRAIGHT OVER TO JULIA BOORSTIN FOR THAT REPORT. JULIA.

JULIA BOORSTIN: KELLY, THAT'S RIGHT. DISNEY EARNINGS PER SHARE BEATING EXPECTATIONS. THE COMPANY ANNOUNCING EARNINGS OF $1.89 A SHARE, THAT'S UP 22% FROM THE YEAR AGO QUARTER AND IT BEATS EXPECTATIONS OF $1.61 PER SHARE. NOW I HAVE TO SAY THAT THAT EARNINGS PER SHARE IS EXCLUDING A 1.6 BILLION ONE-TIME NET TAX BENEFIT ASSOCIATED WITH THE FEDERAL INCOME TAX LEGISLATION. THE TAX REFORM – IF YOU WERE TO INCLUDE THAT, THE EARNINGS PER SHARE WOULD BE $2.91, BUT IF YOU WANT TO DO APPLES TO APPLES VERSUS EXPECTATIONS, IT'S $1.89 VERSUS THE $1.61 EXPECTED AND UP FROM $1.55 A YEAR AGO. NOW REVENUE COMING IN A HAIR LIGHTER THAN EXPECTATIONS. REVENUE OF $15.35 BILLION DOLLARS, THAT'S UP 4% FROM THE YEAR AGO QUARTER. ANALYSTS HAD BEEN EXPECTING $5.48 BILLION. YOU SEE DISNEY SHARES NOW MOVING 1.5% HIGHER. IF YOU WANT TO LOOK AT THE DIFFERENT DIVISIONS THAT ARE REALLY DRIVING THIS: PARK AND RESORTS BEATING EXPECTATIONS ON BOTH THE TOP AND BOTTOM LINE, PARKS AND RESORTS REVENUE GROWING 13%, PARKS AND RESORTS OPERATING INCOME UP 21%, STUDIO ENTERTAINMENT JUST A HAIR LIGHTER AS HOME ENTERTAINMENT FELL SHORT OF EXPECTATIONS BUT THE BOX OFFICE DID WELL. AND THEN SOME COMMENTARY ON MEDIA NETWORKS, A LITTLE BIT LIGHTER THAN EXPECTED ON ADVERTISING REVENUE, I BELIEVE. BUT WE HAVE HERE TO TALK WITH US ABOUT THIS DISNEY CEO BOB IGER. BOB, THANKS SO MUCH FOR JOINING US TO DISCUSS YOUR EARNINGS. SO, PARKS AND RESORTS, WHAT'S GOING ON THERE TO REALLY DRIVE THIS UPSIDE SURPRISE IN BOTH THE TOP AND BOTTOM LINE?

BOG IGER: WELL, IT STARTS WITH SUCCESS ACROSS THE GLOBE. PARTICULARLY IN SOME OF OUR INTERNATIONAL – OR IN ONE PARTICULAR INTERNATIONAL PARK AND RESORT IN PARIS THAT HAD A NUMBER OF YEARS WHEN THE NUMBERS WEREN'T THAT GOOD AND THEY'VE IMPROVED SUBSTANTIALLY. BUT WE'VE ALSO HAD RECORD RESULTS FOR OUR DOMESTIC OPERATIONS AS WELL: RECORD REVENUE, RECORD BOTTOM LINE. SO IT IS A – BASICALLY AN ACROSS THE BOARD SUCCESS STORY. IT ALSO INCLUDES OUR CRUISESHIPS WHICH ALSO HAD A GREAT QUARTER.

BOORSTIN: NOW YOU'RE – THERE'S ALWAYS A BIG EMPHASIS ON YOUR CABLE NETWORKS, BUSINESS, PARTICULARLY ESPN. YOU SEE THE CABLE NETWORKS REVENUE WAS UP 1% BUT THE OPERATING INCOME WAS DOWN 1%. WHAT'S GOING ON THERE AND WHAT'S THE HEALTH OF ESPN RIGHT NOW?

IGER: WELL THERE WERE SOME INS AND OUTS IN THIS QUARTER, PARTICULARLY WHEN IT INVOLVES SOME HIGH-PROFILE EVENTS LIKE THE COLLEGE FOOTBALL PLAYOFFS. IF YOU LOOK AT THE UNDERLYING BUSINESS, WHAT WE'VE SEEN IS IMPROVEMENT WHEN IT COMES TO SUBLOSSES, MEANING THE SUBLOSSES ABATED SOMEWHAT IN THE QUARTER, AND THAT'S A GOOD SIGN. BUT PARTICULARLY IMPORTANT OR ENCOURAGING – OR NOTEWORTHY, SOMETHING THAT IS MORE NOTEWORTHY –SORRY, I'M TRYING TO GET THIS OUT – IS THE FACT THAT THE ADOPTION RATE OF NEW OVER-THE-TOP BASICALLY DIGITAL MVPDs HAS IMPROVED OR GROWN SIGNIFICANTLY. AND THAT'S IMPORTANT FOR A NUMBER OF REASONS. BECAUSE FIRST OF ALL, THERE ARE SIGNS THAT YOUNG PEOPLE ARE COMING INTO TO MULTICHANNEL TELEVISION. PEOPLE THAT WERE ONCE CALLED OR THOUGHT TO BE "CORD-NEVERS" ARE STARTING TO ADOPT TO PACKAGES THAT ARE LESS EXPENSIVE. HULU, ABOUT $39 A MONTH. FEWER CHANNELS BUT MORE MOBILE-FRIENDLY. THAT'S A VERY GOOD SIGN. AND ESPN AS WELL AS OUR OTHER CHANNELS ARE ON ALL OF THOSE SERVICES AND ALL OF THE PACKAGES THAT ARE OFFERED.

BOORSTIN: SO FOR YOUR OVERALL SUBSCRIBER NUMBERS, ARE YOU SEEING THE LOSSES IN TRADITIONAL PACKAGES BEING COMPENSATED FOR BY GROWTH IN THE DIGITAL PACKAGES OR HAVE THEY NOT COMPENSATED FOR IT?

IGER: NO BASICALLY WHAT WE'RE SEEING IS THAT WE'VE SEEN CONTINUED LOSSES ON THE NONDIGITAL SIDE OR THE MORE TRADITIONAL PLATFORM FRONT, BUT THEY HAVE BEEN ECLIPSED BY, IN TERMS OF GROWTH, OR BASICALLY – THEY NET DOWN TO MORE POSITIVE STORY BECAUSE OF THE GROWTH IN THE DIGITAL PLATFORMS, THE OVER-THE-TOP PLATFORMS.

BOORSTIN: SO THANKS TO THE OVER-THE-TOP PLATFORMS YOUR SUBSCRIBER NUMBERS ARE ACTUALLY POSITIVE?

IGER: THE SUBSCRIBER NUMBERS IN THE QUARTER THAT WE JUST ANNOUNCED WERE NOT DOWN AS MUCH AS THE QUARTERS BEFORE. THERE WAS STILL A DECREASE, A NET DECREASE, BUT THE DECREASE AMONG THE MORE TRADITIONAL SERVICES WAS GREATER – THE INCREASE IN THE NONTRADITIONAL OR OVER THE TOP SERVICES WAS SIGNIFICANT.

BOORSTIN: AND YOU'RE ABOUT TO LAUNCH YOUR FIRST TRUE OVER-THE-TOP – TRUE OVER-THE-TOP SERVICE APP. WHAT CAN YOU TELL US ABOUT WHEN IT'S GOING TO LAUNCH AND HOW MUCH IT'S GOING TO COST?

IGER: CORRECT. WHAT WE'RE GOING TO DO IS– IN SOME TIME IN THE SPRING – WE'RE GOING TO LAUNCH A COMPLETELY REVISED AND BASICALLY REDESIGNED ESPN APP, THAT ONE APP WILL HAVE THREE PRIMARY FEATURES TO IT. ONE, SCORES AND HIGHLIGHTS. THE SCORES AND HIGHLIGHTS WILL BE WITH BETTER AUDIO, BETTER VIDEO, BETTER USER INTERFACE AS WELL AS BASICALLY MORE CUSTOMIZATION AND PERSONALIZATION. IN ADDITION TO THAT YOU'LL BE ABLE TO WATCH, ON THE SAME APP, STREAMED LIVE ESPN NETWORKS, PROVIDED YOU ARE A SUBSCRIBER TO ONE OF THE SERVICES, TRADITIONAL OR NONTRADITIONAL. AND THEN THE THIRD FEATURE IS A PLUS SERVICE. WE'RE CALLING IT ESPN PLUS. THAT WILL INCLUDE AN ARRAY OF LIVE PROGRAMMING THAT IS NOT AVAILABLE – LIVE SPORTS, LIVE SPORTS EVENTS, NOT AVAILABLE ON THE CURRENT CHANNELS. AND THAT'S BY THE THOUSANDS. IN ADDITION TO THAT, A LOT OF OTHER PROGRAMMING LIKE THE 30 FOR 30 SERIES.

BOORSTIN: AND CAN YOU TELL US HOW MUCH THAT'S GOING TO COST?

IGER: YES. WE'RE ANNOUNCING TODAY THAT WILL BE FOR $4.99.

BOORSTIN: BREAKING NEWS, $5. VERY INTERESTING. WE ALSO HAVE TO ASK ABOUT YOUR FOX DEAL, OF COURSE, WHICH YOU ANNOUNCED A LITTLE LESS THAN A MONTH AGO. WHERE DOES IT STAND NOW? HOW CLOSE ARE YOU TO CLOSING IT?

IGER: WELL, WHERE IT STANDS IS -- AS YOU KNOW, WHEN YOU DO A DEAL LIKE THIS, YOU IMMEDIATELY ESSENTIALLY APPLY FOR REGULATORY APPROVAL IN MULTIPLE JURISDICTIONS AROUND THE WORLD, AND THAT PROCESS IS UNDER WAY RIGHT NOW WHERE WE ARE FILING IN PLACES THAT WE MUST FILE. THAT PROCESS WILL TAKE A WHILE AS WE SAID WHEN WE CLOSED THE DEAL. WE DON'T HAVE MUCH INSIGHT IN TERMS OF THE TIMING OF THAT EXCEPT THAT WE'RE FOLLOWING BASICALLY THE RULES OF THE LAW WE HAVE TO FOLLOW WHEN SOMETHING LIKE THIS OCCURS. AND WE WERE ENCOURAGED WHEN WE MADE THE DEAL ABOUT THE PROSPECTS FOR REGULATORY APPROVAL AND WE REMAIN THAT WAY.

BOORSTIN: AND YOURE STILL ON TRACK FOR 12 TO 18 MONTHS, YOU THINK?

IGER: YES. AGAIN, THERE'S VERY LITTLE NEWS THERE OTHER THAN WE SPENT THE LAST SIX WEEKS OR SO, YOU KNOW, LEARNING MORE ABOUT THEIR BUSINESSES, IN PARTICULAR I'VE BEEN MEETING WITH ALL THEIR SENIOR EXECUTIVES AND I'LL SAY THAT KNOWING WHAT WE KNOW NOW, WE'RE MORE EVEN MORE ENCOURAGED BY THE ASSETS WE'RE BUYING AND THE TALENT THAT COMES WITH IT.

BOORSTIN: ARE YOU AT ALL CONCERNED ABOUT ANOTHER BUYER, MAYBE SAY A COMCAST, WHO PUT IN ANOTHER OFFER, TRYING TO COME IN AT A HIGHER PRICE?

IGER: WELL I DON'T REALLY HAVE A REACTION TO THAT. I'M REALLY NOT PRIVY TO ANY INFORMATION THAT WOULD BE NEWSWORTHY IN ANY WAY. IF YOU'VE GOT A QUESTION REGARDING WHAT THEIR INTENTIONS ARE, YOU CAN ASK THEM. BUT WE DON'T HAVE ANYTHING TO SAY.

BOORSTIN: AND JUST A FINAL QUESTION ABOUT THE TAX REGULATORY REFORM, YOU ANNOUNCED $1.6 BILLION IMPACT. YOU ALSO ANNOUNCED YOU'RE GOING TO BE GIVING BONUSES TO EMPLOYEES AND INVESTING IN EDUCATION WHAT ELSE IS CHANGING? ARE YOU INVESTING IN PARKS AND RIDES HERE? ANYTHING WE SHOULD KNOW?

IGER: WELL AS YOU KNOW WE'VE HAD A GOOD TRACK RECORD OF INVESTING IN ORGANIC GROWTH, IN OUR BUSINESSES, PARKS IN PARTICULAR. I THINK THE RESULTS THAT WE JUST ANNOUNCED ARE THE RESULT OF THOSE INVESTMENTS. WE ALSO INCREASED OUR DIVIDEND NICELY OVER THE LAST NUMBER OF YEARS AND WE BOUGHT BACK A SIGNIFICANT AMOUNT OF OUR STOCK AND WE HAVE BEEN ACQUIRERERS OF OTHER BUSINESS: PIXAR AND MARVEL, LUCASFILM, AND OF COURSE NOW 21st CENTURY FOX. I THINK YOU'LL SEE A BLEND OF INVESTMENT GOING FORWARD THAT WILL, YOU KNOW, BE SOMEWHAT SIMILAR TO THE WAY WE'VE BEEN INVESTING BEFORE, ALTHOUGH AT THE SIZE OF THIS ACQUISITION SUGGESTS WE WON'T BE ACQUIRING ANYTHING, AT LEAST OF ANY SIGNIFICANCE, FOR QUITE A LONG PERIOD OF TIME. THE FACT THAT OUR TAX RATE GOES DOWN FROM ROUGHLY 35% TO ABOUT 24.5% IS IN FISCAL 18 AND THEN DOWN 21% THEREAFTER WILL GIVE US ACCESS TO MORE FREECASH FLOW. AND I'M GUESSING THAT WILL RESULT IN MORE INVESTMENT BUT WE HAVEN'T DETERMINED EXACTLY WHERE THAT WILL BE.

BOORSTIN: GREAT, WELL YOU'LL HAVE TO KEEP US POSTED. AND I WILL LET YOU GO ON YOUR WAY TO YOUR ONFERENCE CALL WHICH WILL BE STARTING SHORTLY.

IGER: THANK YOU.

BOORSTIN: BOB IGER, CEO OF DISNEY. THANK YOU FOR JOINING US. GUYS, BACK OVER TO YOU.

For more information contact:

Jennifer Dauble
CNBC
t: 201.735.4721
m: 201.615.2787
e: jennifer.dauble@nbcuni.com

Emma Martin
CNBC
t: 201.735.4713
e: emma.martin@nbcuni.com

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