Good afternoon, and it’s my pleasure to welcome everyone to The Walt Disney Company’s third quarter 2021 earnings call. Our press release was issued about 25 minutes ago and is available on our website at www.disney.com/investors. Today’s call is also being webcast and we will post a transcript of this call to our website. Joining me remotely today are Bob Chapek, Disney’s Chief Executive Officer; and Christine McCarthy, Senior Executive Vice President and Chief Financial Officer. Following comments from Bob and Christine, we of course will be happy to take some of your questions. So, with that, let me turn the call over to Bob to get started.

Thanks, Lowell, and hello, everyone. Today, I’d like to start off by talking about our Company’s priorities for the future. As has been the case for Disney’s nearly 100-year history, it all begins with great storytelling, which is the foundation of our special connection to audiences and guests. And our foremost priority will continue to be to tell the world’s most original and enduring stories brought to life by the world’s most talented creators. As home to some of the most beloved franchises, we will maximize the synergy of our unique ecosystem to further deepen consumers’ connection to our characters and stories. And we will use the power of our far-reaching platforms and emerging technologies to better anticipate what our consumers want and deliver them a more seamless and more personalized entertainment experience. We are executing against these priorities, and results clearly speak for themselves. Looking across the Company over the past quarter, we are pleased with the trajectory we are on as we continue to grow our businesses, despite the challenges presented by the ongoing everchanging COVID-19 pandemic. We ended the third fiscal quarter in a strong position, with adjusted EPS up tenfold to $0.80 compared to $0.08 last year. At our Parks, Experiences and Products business, we’re encouraged by some of the positive trends we’re seeing, and new developments we have been hard at work on, including the brand-new Avengers Campus at Disney California Adventure, where guests can team up with their favorite superheroes in thrilling ways. At our international parks, Shanghai is celebrating its fifth anniversary this year with great fanfare, and we welcome the first guests to our reimagined Marvel themed hotel at Disneyland Paris. Meanwhile, work continues on a wide array of new experiences, including the one-of-a-kind Star Wars themed Galactic Starcruiser at Walt Disney World. And as part of a multiyear transformation of EPCOT, we’ll soon introduce our extraordinary new nighttime spectacular Harmonious. Last month, we completed our first cruise since the start of the pandemic with the Disney Magic, which is currently sailing short-term staycations for UK residents. And the Disney Dream set sail on its first U.S.-based cruise this week. Future bookings for all of our ships remain strong, with bookings in the third quarter in particular, having benefited from the announcement of our fall 2022 itineraries and the successful marketing launch of our fifth ship, the Disney Wish, which will set sail in summer of 2022. As our parks business continues its recovery and we see demand grow, we are now putting into action some of the amazing guest-centric services that we have been developing over the last few years. These include Magic Key, our recently announced new annual pass membership program at Disneyland. It provides great value and a variety of options for our guests, and will be available starting on August 25th. The reaction to the news from fans has been extremely positive. Additionally, we’ve made significant investments in sophisticated technology and tools, creating a revolutionary new multi-tiered service we’re calling Disney Genie, that will enable our guests to more easily and efficiently navigate everything our parks have to offer. We’re very, very excited about this new service, and we’ll be providing additional detail soon. The goal of Disney Genie, which will appear in a user-friendly app, is to create a better, more personalized and customized experience for guests, putting them in control and providing even greater flexibility and choice. They’ll be able to spend less time waiting in line and figuring out what attractions or dining options are available, and more time having fun. On the direct-to-consumer side, we are extremely pleased with the continuing success of our portfolio of streaming services. Disney+, ESPN+ and Hulu have performed incredibly well with 116 million, 14.9 million and 42.8 million subscribers, respectively, for a total of nearly 174 million subscriptions. Numerous breakout hits from our beloved brands, including Pixar’s Luca and Marvel’s Loki and the Falcon and the Winter Soldier have contributed to strong engagement and new subscriber growth in core Disney+ markets. And we have continued to launch Disney+ in new markets around the world, including Disney+ Hotstar in Malaysia and Thailand in Q3. Disney+ is also currently available in a limited capacity in Japan and will expand to the full market in late October, followed by additional APAC markets, including South Korea, Taiwan and Hong Kong in mid-November. The launch of Disney+ in Eastern Europe has moved from late 2021 to summer of 2022, primarily to allow for an expanded footprint that will include parts of the Middle East and South Africa. Additionally, we’re excited about the launch of Star+ throughout Latin America later this month. As we’ve said, our direct-to-consumer business is the Company’s top priority. And among our unique advantages in promoting and growing our DTC service are our powerhouse brands and the vast array of direct consumer touchpoints we have across our businesses, from our media networks to our theme parks to our consumer products. This synergy enables us to raise consumer awareness and further increase engagement with our streaming services. And the power of this synergy will be on full display on November 12 when we celebrate Disney+ Day with an unprecedented Company-wide cross-promotional campaign. Our robust pipeline of content continues to fuel growth, and we have an incredible lineup of new programming for Disney+. On Thanksgiving Day, we are thrilled to be premiering the first of Peter Jackson’s highly anticipated six-episode Beatles documentary, Get Back. We also have exciting new series from Marvel, Star Wars and National Geographic coming later this year, including Marvel’s Hawkeye, starring Jeremy Renner and Hailee Steinfeld; The Mandalorian Spin-Off, The Book of Boba Fett and National Geographic’s, Welcome to Earth with Will Smith. With respect to our current approach to distributing our feature-length films, last year, in light of the prolonged and unpredictable nature of the pandemic, we needed to find alternative ways to bring our movies to consumers while theaters were closed. And once they began to reopen, there was still widespread reluctance to return. Therefore, we adopted a three-pronged strategy for releasing our films that consisted of theatrical releases, direct to Disney+ and a hybrid of theatrical plus premier access as we did with Cruella, Jungle Cruise and Marvel’s Black Widow, the top-performing film at the domestic box office since the start of the pandemic. Both, Bob Iger and I, along with the leaders of our creative and distribution teams, determined this was the right strategy because it would enable us to reach the broadest possible audience. And just to reiterate, distribution decisions are made on a film-by-film basis based on global marketplace conditions and consumer behavior. We will continue to utilize all available options going forward, learn from insights gained with each release and innovate accordingly, while always doing what we believe is in the best interest of the film and the best interest of our constituents. We have an incredible slate of upcoming theatrical films, starting with Free Guy, which premieres tomorrow, followed by Marvel’s newest action adventure, Shang-Chi and the Legend of the Ten Rings on September 3rd. The highly anticipated live-action musical, West Side Story from Steven Spielberg, is set for December as is the Kingsman, a prequel in the popular Kingsman series. We have Disney Animation Studios’ Encanto, an incredibly heartwarming story set into a magical town in Colombia featuring music by the incomparable Lin-Manuel Miranda. Our Marvel slate includes four feature films in fiscal 2022, the all-new Eternals, alongside sequels to Doctor Strange, Thor and Black Panther. A brand new Indiana Jones Adventure starring Harrison Ford is due in the summer, as is the origin story of another intrepid explorer in Lightyear, a spin-off of the beloved Toy Story franchise. It’s a widely appealing slate with something for everybody. Our goal is always to provide guests and consumers with unparalleled entertainment, whether they’re visiting one of our parks or watching one of our films in a theater or on our streaming platforms. And as we continue our recovery, we believe we are taking the right steps to further this goal while growing our businesses and increasing shareholder value. Personally, I am as optimistic as ever about the future of our Company. We have a robust and growing portfolio of DTC services powered by the world’s best storytellers and greatest brands and franchises, and the parks business, which extends those stories and creates a place where magic comes to life in a more guest-friendly way than ever. With that, I’ll turn it over to Christine and she’ll talk in greater detail about the quarter and the way ahead.

Thanks, Bob, and good afternoon, everyone. Excluding certain items, diluted earnings per share for the third fiscal quarter was $0.80, an increase of $0.72 from the prior year quarter. I’ll walk through our results today by segment, starting with Parks, Experiences and Products where we continued to benefit from improvements and recovery at our parks and resorts as well as at consumer products. Segment operating income at DPEP in Q3 increased by $2.2 billion year-over-year. At parks and experiences, we continued to benefit in the third quarter from the reopening of our sites around the world. Walt Disney World Resort and Shanghai Disney Resort were both open for the entire third quarter. Whereas in the prior year quarter, Walt Disney World was closed for the entire quarter, and Shanghai Disney was open for 48 days. Hong Kong Disneyland and Disneyland Paris were open for 72 days and 19 days, respectively, in the third quarter versus 10 days and zero days in the prior year quarter. And Disneyland Resort was open for 65 days during the third quarter and was closed for all of the prior year quarter. At Walt Disney World, third quarter attendance levels were generally at or near our daily capacity levels, which increased throughout the quarter. Disneyland Resort also steadily increased attendance and capacity following its reopening at the end of April and particularly after the lifting of California state restrictions on June 15th. Guest spending at our domestic parks has been exceptionally strong, with third quarter per capita spending up significantly versus fiscal 2019 at both Walt Disney World and Disneyland. Guest spending has benefited from pent-up demand and favorable guest mix, driving higher admissions per capita as well as from spending on products related to Star Wars, Galaxy’s Edge and Avengers Campus. Looking forward, theme park reservations at both of our domestic parks remain strong, and we continue to utilize our yield management strategy to deliver the optimal guest experience and provide flexibility to our guests during these dynamic times, all while driving economic margin for our shareholders. At consumer products, improved results year-over-year were driven by growth at both our merchandise licensing and retail businesses. Growth in merchandise licensing was primarily due to higher revenue from merchandise, based on several of our key franchises, including Mickey and Minnie, Star Wars, including the Mandalorian, Disney Princess and Spider-Man. The increase in retail was due to higher results at Disney stores, most of which were closed in the prior year quarter as well as a comparison to the impairment of store assets in the prior year quarter. Moving on to our Media and Entertainment Distribution segment. Third quarter operating income decreased by about $1 billion versus the prior year as improved results at direct-to-consumer were offset by declines at Linear Networks and Content Sales/Licensing and Other. At Linear Networks, operating results were lower at both our domestic and international channels. At domestic channels, both cable and broadcasting operating income decreased in the third quarter versus the prior year. The decrease in operating income at cable was due to higher programming and production costs and higher marketing costs, partially offset by higher advertising and affiliate revenue. As we called out last quarter, the increase in Q3 programming and production costs was due to the return of live sports at ESPN, driven by the NBA and Major League Baseball. In the prior year quarter, a significant number of live sporting events were canceled or delayed due to COVID-19. At broadcasting, lower results from the ABC television network were only partially offset by growth at our owned television stations. The decrease at ABC was largely due to higher programming and production costs, partially offset by higher advertising and affiliate revenue. The increase in programming and production costs was due to an increase in the average cost of programming and the shift in timing of the Academy Awards, which aired in the third quarter compared to the second quarter in the prior fiscal year. Domestic advertising revenue increased year-over-year at both cable and broadcasting, driven by favorable comparisons versus the prior year due to COVID-19. At cable, the increase was driven by ESPN, where third quarter advertising revenue increased by $400 million versus the prior year, reflecting the return of live sporting events. Q4-to-date, domestic cash advertising revenue at ESPN is currently pacing above prior year. But bear in mind that this comparison is complicated by various COVID and timing impacts from the prior year. We’re not going to provide a forecast for the quarter, but the underlying sports ad marketplace remains strong for us, particularly in the quarter in which the Olympics were held. At broadcasting, higher advertising results were primarily driven by increased rates and the timing of the Academy Awards, which benefited both the owned television stations and ABC. Total domestic affiliate revenue increased 4% in the quarter. This was driven by a benefit of 8 points of growth from higher rates, offset by a 3-point decline due to a decrease in subscribers. Results at international channels declined due to higher programming and production costs, partially offset by higher advertising revenue. Both of these factors were impacted by the return of live sporting events and in particular, the Indian Premier League, which held cricket matches from April 9th until the season was postponed on May 4th versus no matches in the prior year quarter due to COVID-19. Turning to Direct-to-Consumer. Q3 operating income improved by over $300 million versus the prior year, driven by Hulu, partially offset by a higher loss at Disney+. The increase at Hulu was due to growth in subscription and advertising revenue, partially offset by higher programming costs related to Hulu Live. Hulu ended the third quarter with 42.8 million paid subscribers, up from 41.6 million in Q2, inclusive of the Hulu Live digital MVPD service. Paid subscribers to Hulu Live decreased slightly to 3.7 million from 3.8 million at the end of Q2. At Disney+, operating results decreased versus the prior year due to higher programming and production, marketing and technology costs, driven by the ongoing expansion of the service. These higher costs were partially offset by increased subscription revenue, reflecting subscriber growth and increases in retail pricing as well as Premier Access revenue for Cruella. Note that Disney+ Premier Access revenue is included in our DTC operating results but is excluded for the purposes of calculating ARPU. As Bob mentioned earlier, we ended the third quarter with 116 million global paid subscribers to Disney+, up from approximately 104 million in the second quarter. Disney+ Hotstar accounted for the majority of our net subscriber additions between Q2 and Q3, making up a little less than 40% of our total Disney+ subscriber base as of the end of the third quarter. However, subscriber growth was also solid at our core Disney+ markets, excluding Disney+ Hotstar, with total quarter-over-quarter net adds in those markets consistent with net adds from Q2. Disney+’s overall ARPU this quarter was $4.16. Excluding Disney+ Hotstar, it was $6.12 or an increase of about $0.50 versus the second quarter, reflecting a benefit from the recent price increases, both domestically and abroad. Disney+ Hotstar ARPU also increased from Q2 to Q3 due to higher ad revenue per subscriber, reflecting the roughly four weeks of IPL matches that were played in Q3 versus none in Q2. At ESPN+, operating results in the quarter were comparable versus the prior year. ESPN+ ended Q3 with 14.9 million paid subscribers, reflecting over 1 million net subscriber additions versus the second quarter. Content Sales/Licensing and Other operating income at DMED decreased in the third quarter versus the prior year due to lower home entertainment and theatrical distribution results. The decrease in home entertainment results was due to lower unit sales of new release titles, reflecting the performance of Raya and the Last Dragon and Soul in the third quarter compared to Star Wars: The Rise of Skywalker, Frozen II, Onward, Call of the Wild, and Ford v. Ferrari in the prior year quarter, along with lower catalog sales. The decrease in theatrical distribution results was primarily due to higher marketing expense for future releases and lower operating income from titles in release. Looking ahead, there are a handful of items I would like to mention, as you think about our fourth quarter. At Linear Networks, we expect fourth quarter operating income to decline versus the prior year, reflecting incremental marketing and programming costs at ABC and FX, in addition to an adverse comparison to last year’s benefit from the 53rd week. The increase in marketing and programming expenses at ABC and FX is driven by more than twofold increase in the number of series premieres versus the prior year quarter as productions in the prior year were impacted by COVID. As it relates to the 53rd week, recall that last year, we estimated a benefit of approximately $200 million to the Company, which primarily impacted our Linear Networks. At Content Sales/Licensing and Other, we are expecting an operating loss in the fourth quarter, driven by a number of items, including higher marketing and distribution costs in the theatrical window due to more titles being released versus the prior year, in addition to lower results from home entertainment and third-party content licensing. We now expect our capital expenditures in fiscal 2021 to be approximately $200 million lower than our fiscal 2020 CapEx of $4 billion due to lower spending at our domestic parks and resorts, partially offset by increased spending for facilities across the enterprise and technology for our DTC services. And finally, in light of the ongoing recovery from the COVID-19 pandemic as well as our continued prioritization of investments that support our growth initiatives, the Board decided not to declare or pay a dividend for the first half of fiscal 2021. Longer term, we do anticipate that both dividends and share repurchases will remain part of our capital allocation strategy. However, for the time being, we don’t anticipate declaring a dividend or repurchasing shares until we return to a more normalized operating environment and our leverage is back to levels more consistent with a single A credit rating. And with that, I’ll now turn the call back over to Lowell, and we would be happy to take your questions.

Okay. Thanks, Christine. And once again, as we transition to the Q&A, let me note that since we are not physically together this afternoon, I will do my best to moderate the Q&A by directing your questions to the appropriate executive. And with that, we are ready for the first question.

Thanks. Lowell, I’ll let you choose the speakers, but here are the questions. One is, I wanted to understand how the Company is thinking about near-term theatrical releases, given the steep fall-off in second week box office, rise of the Delta variant, international markets still not opened. So why not delay or pause the release schedule? And then, secondly, on DTC profits, I guess, more Hulu profits, it looks like continually they’re getting better than expected. I think you turned profitable this quarter with Hulu. So, I’m wondering why that improvement and why not revisit maybe some of the guidance that we shared earlier on DTC profitability, just given the continual improvement in it looks like Hulu profitability? Thanks.

Michael, as you probably recognize, we live in a very uncertain world in terms of the recovery of some of our markets in the theatrical exhibition world. It’s certainly part of that. We’ve said from the very beginning that we value flexibility in being able to make as last-minute calls as we can, given what we see in the marketplace. And certainly, when we planned our schedule that we’re executing right now, we did not anticipate, nor did I think anybody, the resurgence of COVID with the Delta variant that would have such a significant impact on the marketplace. At the same time, when you work in an ecosystem, having a lot of partners, they need to be able to plan their business too. And so, at some point, we have to put a stake in the ground and say, for example, Shang-Chi, that’s going to be a title that we’re going to put in the marketplace or Free Guy, that’s going to be a title that we’re going to put into the marketplace. Not knowing, again, three months earlier when you make that commitment, what exactly the marketplace is going to look like. But, what I do think that says, Michael, it says that we value flexibility and we value to follow where the consumer is going to go. And while some of that’s uncertain, I think, in terms of relative to where the rest of the market is, you see that we’ve got more flexibility in terms of how we program. And nothing is in stone because the marketplace is rapidly changing. But at some point, you’ve got to put a stake in the ground and say, this is what we’re going to do. And that’s where we ended up on Shang-Chi and Free Guy, which are our next two titles out.

Bob, can I just follow up? Why wouldn’t you just add from your access, given what you saw happen, I think, successfully with Black Widow to those two titles?

Okay. Good questions. On Free Guy, obviously, this is a title that we acquired under a different distribution assumption and set of agreements. So, we don’t have the degree of freedom to do that on Free Guy. On Shang-Chi, we think it’s actually going to be an interesting experiment for us because it’s got only a 45-day window for us. So, the prospect of being able to take a Marvel title to the service after going theatrical with 45 days will be yet another data point to inform our actions going forward on our titles. But once again, I’ll refer back to my previous answer. When we planned Shang-Chi, that title was planned on being in a much more healthy theatrical environment. And at this point, unfortunately, due to distribution agreements that we have and due to just the practicalities of last-minute changes, it wouldn’t be possible.

I’ll address your question about Hulu, Michael. You are completely right. Hulu performed better than we anticipated and turned a profit this quarter. There are a couple of factors at play. One is that it continues to experience subscriber growth and also very strong advertising revenue. The advertising boost is due to higher sell-through rates, a lot of addressable advertising, and a significant increase in the dynamic ad insertion technology we have in Hulu Live. So, these elements are contributing to its success. Meanwhile, like all our other streaming services, they are increasing their production, programming, and marketing expenses to promote new shows. We are very satisfied with Hulu’s progress, but we won’t be updating our guidance yet since we are currently working on our fiscal ‘22 annual operating plan. If we determine that an update is necessary after that is completed, we will certainly provide one.

And Michael, thanks for the questions. Operator, next question, please.

My questions are on the parks side, if I can. I guess, the first one is, we’ve seen really, really much improved results this quarter. And moving forward, I’m curious if you’re seeing any recent impact from the Delta variant in the domestic or international parks maybe cause for concern, particularly as you’re increasing capacity. And then, just staying on the parks, maybe you can elaborate on how we should view sort of longer-term profitability, given the improvements you’re able to make in terms of automating many aspects of the parks during COVID or while they were closed. But now, maybe with heightened cleaning expenses perhaps staying for a while and other expenses related to COVID staying for a while, given how this variant has continued to kind of make COVID still very much part of our lifestyle. Thank you.

Okay. In terms of impact of the Delta variant, we see strong demand for our parks continuing. And the primary noise that we’re seeing right now are really around group or convention cancellations. In other words, large groups that are coming in relatively short-term. But on the whole, we see really strong demand for our parks. In fact, our park reservations now are above our Q3 attendance levels. And as you just saw with our earnings announcement, our Q3 attendance levels were pretty darn good. So, we’re still bullish about our park business going forward. I may also suggest, as a bridge to the second question that we’ve implemented a reservation system that’s going to enable us to spread our demand, increase our yield and improve our guest experience at the same time. And in terms of the long-lasting impacts that you mentioned, I think some of the cost implications that we need to do for hygienic purposes are going to be relatively short-lived. And frankly, in the grand scheme of operating our parks, not all that material. But what will be the long-lasting impact is the improvements that we’re making with guest personalization and guest choice, therefore, affecting the tremendous yield benefits that we’ve been able to extract over the last few quarters. And that’s only going to grow in the future with our ability to really do world-class yield management systems through our new reservation system.

Hi Alexia. And I’d add to that a couple of things. One is, we have seen very, very strong per caps in addition to all the yield management things Bob mentioned. But the per cap, in my comments, I referred to them as exceptionally strong. And I would not use that word were it not for the fact that they were exceptional. Last quarter, I said that they were up strong double-digit and this quarter was even stronger. If you look at - when a park is closed for a long period of time, as Disneyland was, as Paris was, when they reopen, the per caps really shoot up. And we still have, even though Walt Disney World isn’t open now for over a year, we’re still seeing extremely strong per cap growth continue at that park. So, in addition to all the technology things that we’re implementing, as Bob mentioned, reservation systems, the dining apps, we’re just seeing the consumer behavior be very favorable. And the guest experience is something that we’re going to be focused on, especially as we continue to reopen.

Alexia, thanks for the questions today. Operator, next question, please.

Thank you. Good afternoon. A couple probably for Christine. Christine, I was wondering if you could give us the Hulu advertising growth in the quarter. I think, you’ve given that to us in prior quarters. And then, also, just are you expecting the IPL to come back in September at this point? And any update on the Latin American sports situation, since that’s part of your launch there. And then, if I can ask Bob a parks question just on technology. You mentioned the Disney Genie. How substantial of a sort of an improvement or evolution in the guest experience are you expecting to bring to market? And then MyMagic+ has been around for a while. And I’m just wondering if you think there’s a real transformation ahead for the business as you take advantage of the last year-plus of downtime to reinvent the experience? Just maybe add some context would be helpful.

Okay. Ben, you used the correct word, transformational. MyMagic+ was us basically sticking our toe in the pond of this type of transformational work. Disney Genie though is that program on steroids. This is going to revolutionize our guest experience. Guests are going to spend less time waiting and more time having fun in our parks with a dramatically improved guest experience. That’s going to make their navigation of their day and their planning of their day much easier. Essentially, what it’s going to do is take the consumer preferences that we know from our consumers, given what we know from them, and blend that with basically industrial engineering data that we’ve got in terms of how our park is operating that day and meld those together to make suggestions on the fly that not only will lead to that improved guest experience, but at the same time lead to substantial commercial opportunities as the guest navigates their base. So, it certainly qualifies in my mind for both materiality and transformational impact on our business from a yield standpoint.

Sure. Ben, I'll try to cover your questions. Hulu experienced significant advertising growth this quarter, and we continue to see this trend. While we haven't specified the numbers, I can say it's driven by increased impressions and rates. Additionally, the dynamic ad insertion capability in Hulu Live is beneficial. Our advertising sales team could sell more inventory if it were available due to high demand. To provide some context, we emerged from a strong upfront with approximately 40% of total upfront dollars allocated to streaming and digital, which includes not only Hulu but also our other entertainment and sports platforms. This reflects that the advertising activity on Hulu is certainly a growth driver. The IPL is returning on September 19 and will run until around mid-October, with the final match scheduled for October 15. For Disney+ Hotstar, IPL is a key element, but it’s part of a broader portfolio that includes general entertainment and other sports. We have a wealth of original and library content from all Disney+ brands and IP, adding over 18,000 original local programs annually. We are optimistic about both the IPL and Hotstar+. The launch for Latin America is scheduled for later this quarter, but I don't have any updates regarding sports.

Operator, next question comes from Doug Mitchelson of Credit Suisse.

So, two questions. It’s certainly nice to see the U.S. parks profitable in fiscal 3Q. And I note that operating expenses are back at 81% of 2019 fiscal 3Q levels, while revenues about 60% of 2019 levels. And that seems consistent with commentary that you made in the past that you have to ramp overhead in advance of consumers coming back to the park. So, my question is, is the overhead now sort of re-ramped at the Parks? Should we look at this as the right overhead level? And from here, it’s variable cost growing with consumers continuing to come back, and that’s how we should think about modeling the parks going forward? And then, the second area is just on streaming. I hope you could discuss the health of Disney+. How was engagement trending in the quarter? How was churn playing in the quarter? What was the impact of Star as you merged in with Disney+ in Europe? And anything else you want to note on the health of Disney+ would be appreciated. Thank you.

We are very optimistic about the growth of Disney+ and our subscriber numbers. We have exceptional content from top storytellers, successful international launches, and the advantages of the Disney bundle. Regarding churn, we are satisfied with the results. Despite recent price increases over the last few quarters, our churn has decreased, even in Latin America and Europe, where we raised prices when we added Star as a sixth brand tile. Our retention rates are strong worldwide, which is encouraging. This success reflects the value we provide to our customers. With new content released regularly, including titles like Luca, Loki, and Falcon and the Winter Soldier, along with significant local investments in international markets, we offer a compelling value proposition. Our low churn, high engagement, and strong retention in regions where we've increased prices demonstrate this effectively. Now, moving on to the cost aspect and our parks' profitability, we can analyze our business through various metrics. In California, all three hotels are operational, and 70% of rooms at Walt Disney World are available. While we are not operating at full capacity yet, many future costs will be variable. As we increase capacity closer to 100%, our efficiencies will improve significantly. Therefore, we anticipate seeing considerable benefits as we advance from this point. Christine, would you like to add anything?

Yes. I would just add that our parks are planning to be fully staffed by the end of this calendar year, 2021, while we monitor the trends related to the Delta variant. We anticipate increasing capacities as demand grows and will thoroughly train our employees as they return. The situation with COVID is constantly evolving, so we will proceed cautiously. Our approach to increasing capacity will be aggressive yet measured; we won't simply open our doors fully. This careful strategy is in place to ensure the health and safety of both our guests and our cast members in the parks.

Doug, thanks for the questions. Operator, next question, please?

Thanks. I have one on Disney+ and one of film. You mentioned that you’re opening in Japan, fully opening in Japan in October. It’s such a big country with a huge affinity for everything Disney. I mean, the Parks are doing really well there, and it’s a very affluent country. So, just wondering if you could give us any color on market size and ARPU. And then, on film, the industry has undergone such massive change over the last two years towards streaming. But obviously, the pandemic has had a big impact, but it was moving in that direction anyway. With the jury out on like how much the box office will come back to pre-COVID levels, how do you think about the success of a film in today’s environment? And how does that impact the way you attract talent, the way you compensate talent? And what changes do you expect to make, if any, in your film strategy from here?

Okay. Obviously, this world has been disrupted by COVID, and we’re all reacting to a very fluid situation in terms of the marketplace. We’re very grateful for the fact that we had the ability to take out a lot of titles, both not only in the theatrical marketplace for those that prefer to watch a film that way, but also at the same time through our Disney Premier Access, and that was a winning strategy for us to give consumers the choice for those that decided that going back to a theater was not for them at the same time. That said, these films, Jessica, were really conceived under a time when we did not know what was going to be happening with consumer behavior three, four years later and certainly didn’t know about COVID at the time. So, we’re dealing under a different sort of set of conditions than we thought. What I will say is that just like we’ve done many times before, as the business has evolved and transformed, we’ve figured out ways to fairly compensate our talent, so that no matter what the business model is that we have to go to market with, everybody feels satisfied. And I will say that since COVID has begun, we’ve entered into hundreds of talented arrangements with our talent. And by and large, they’ve gone very, very smoothly. So, we expect that, that would be the case going forward. Certainly, this is a time of anxiety in the marketplace as a lot has changed recently. And again, these films that we’re releasing right now were imagined under a completely different environment than unfortunately, the fate has delivered us. But, we’re trying to do the best thing for all our constituents and make sure that everybody who’s in the value chain, if you will, feels like they’re having their contractual commitments honored, both from a distribution and a compensation standpoint. What I’ll say before I turn it over to Christine on Japan is that remember that heretofore, as we’ve launched Disney+ around the world, in Japan, we’ve done it with a fairly limited distribution system and that’s about to change going forward. But at the same time, that market is under, as they call it, a state of emergency. And that certainly has disrupted that marketplace as we go from a fairly limited distribution now to a much more broad distribution. Christine?

Yes. Jessica, we fully agree with your assessment of the market and the high degree of affinity that the Japanese market has for Disney IP. So, we’re totally agreeing. We did, as Bob say, a soft launch with a partner last year, but it was only to a small part of the market, and we’re really excited to do the full launch that will be in this coming October for Disney+. And we’ll see how that goes, but we have been very cautiously optimistic as we always are, but we believe that that IP is going to resonate. We don’t, as you know, break out ARPU by individual markets. So, we’ll just be giving you the Disney+ ARPUs the way we currently are doing it.

Okay. Thanks, Jessica. Operator, next question, please.

Okay. Thank you, everyone. This concludes our call today. We appreciate your participation and we look forward to speaking with you next quarter. Have a good day.