EURO DISNEY S.C.A.... Annual Report

February 13, 2017 | Author: Ami Bradley | Category: N/A
Share Embed Donate


Short Description

1 EURO DISNEY S.C.A.... Annual Report2 Introduction Key Figures 4 Chairman's Statement 6 Management Team 10 Our R o le: ...

Description

EURO DISNEY S.C.A.

.............................................................................

Annual Report

Introduction 2

1996 Key Figures

4

Chairman's Statement

6

Management Team

10

Our R o le: to Entertain our Guests

14

S ha re ho l de r Ser vi c e s

18

Ge ra n t's Rep ort

24

Co nso Ii da t ed Fi n a n c i a I Statemen ts

E

uro Disney S.C.A . and its subs id ia ries opera te

Disn eyland" Pari s. Open ed in Ap ril 1992 ,

Disn eylan d Par is includes a Them e Park, seve n th em ed hotels w ith nearl y 5,800 rooms,

Disn ey Village ente rta inme nt centre and a 2 7-h ole go lf co urse . The Group also contro ls 1,300 hect ares (3,200 ac res) of undevelope d land aroun d th e reso rt , 32 km fro m th e cent re of Paris an d w ith exceptiona l tra nspo rtati o n fac ilities and infrastructure systems, enhanced by the rece nt opening of direct high speed train link s wi th Lo ndo n, Brussels an d the West of France. In a difficult French tourism environment, new records were reached in 1996, with Par k attendance at 11. 7 million a nd ho tel occupancy at 72 %, way above th e nationa l ave rage. D isn eyland Pa ris is today th e to p "paying" tourist ven ue in France an d we ll established as the lead ing short-break ho liday des tination in Europe. In 1996, th e Grou p ac hieve d 77% gro wth in net profits w hich reach ed FF 202 milli on aga inst FF 11 4 m illion in th e pr evious year. The Co mp any has agreed, w ith th e local public Autho rities, to pro ceed with a new ph ase of development financed princip all y by th ird-parti es. This programme will abov e a ll assert Disneyland Paris as a pr em ium leisure destinati on by doubling th e ca pa city of Di sne y Village. It will a lso kick -st a rt th e constructi on of th e town centre of Val d'Euro pe. In association w ith severa l partners, th e Group has a lrea dy started to ex pa nd Disneyla nd Pari s w ith th e opening of a Plan et H oll yw ood rest aurant in Summer 1996. A Gaumo nt eight -screen mu ltiplex cinema and a second co nve ntion centre adjacent to the Newport Bay Cl u b hotel are currentl y under construction and expected to open in Spring and Autornn 1997 respectively. Future developments include an international sho ppi ng mall , hou sing units a nd offices as well as a ddi tiona l pu blic infrastructures. 1997 w ill be " the Year to be H ere ! " as Disneyland Paris celebra tes its 5 th Anniversa ry. The pro gr amme for 1997 is no velt y-p acked with a new Hunchback of Notre Dam e Ca rniva l Pa rad e, th e re-d ecoration of Sleep ing Beauty's Castle, a Flower Festiva l an d man y new shows an d special eve nts . Gu ests will have unique oppo rt unities to hav e fun a nd disco ver, o r red iscove r, th e magic o f Disn eyland Paris.

I

1996

KEY

FIGURES

NEW RECORDS

1996 Breakdown of Revenues by Activity

were reached,

H ot els

39 %

7'-

in 1996, with Park attendance at

Other

7%

1996 Geographic breakdown of Visitors Franc e

I I .7

41 %

million

I O ther

9%

and hotel

I~:I ~/Sp a i n /

I Ge;rr;;:

I

~

occupancy at 72 % (FF in million s)

Them e Park a nd resorts revenues " Income before lease a nd fina ncia l cha rges as a percentage of revenues "

4 968

1995

4 572

987

1%

11 4

(1 797)

O pe ra ting cas hf lo w

311

308

(1 422)

15 100

15 100

IS 500

5 813

5610

5 496 95

96

Hotel Occupancy rate

94

95

96

Spend per room (ill FF, includin g VAT)

2

++

248

248

95

96

8.8

975

94

276

10. 7

60 %

202

.~+

11.7

1,018

68 %

4 147

Net income/(lo ss)

" exclud ing co ns t ruc tion sa les u incllld ing debt of the unconso lidarcd fina nci ng companies

.++

++ 72%

199 4

10%

Sha reho lde rs' equ ity

United Kingdom

20%

15 %

To ta l debt " ':-

r

10 %

Benelux

F i s c a I ye ar

199 6

\

94

95

96

Theme Park Attendance Number of visito rs (ill millions)

94

Total average Theme Park spend per Visitor (ill FF, including VAT)

3

C H A I R M A N r S 5 TAT E MEN T

.~ I

Close to 50

+

+

++

++

+

MILLION

guests in less than five years

Ladies, Gentlemen , dear Shareholders,

O

ver th e past year, a grea t man y of yo u ha ve sha red yo ur rema rk s advice a nd enco urag ement .

But th ere is one tr a p we will not fall int o, that is the one o f rest ing on o ur laurels. We mu st improve

Indeed , o ur Sha re ho lde rs Club, w hich ex ists pri maril y to keep you full y informed on th e progress

co nsta nt ly. As Mr. Jord an will probabl y ha ve not iced , th ere is a co nt inuing cha llenge to stay a hea d o f th e

of your co mp;l1l y, has alread y reac hed nea rly 18,000 member s.

planned incr ease ill o ur lease a nd fina ncial ch ar ges by incr easing our operationa l efficiencies. Whil e we ha ve

Nev ert he less I wo uld like to remind yo u of th e highli ghts o f th e fiscal yea r a nd provide so me an swer s to

ac quitted ourse lves in th e first stage, th e second one will be particularl y tou gh , since o ur lease a nd financi a l

th e qu est ion s w hic h yo u ha ve posed us in yo ur n um erou s letter s. M r. Tepik's for exa mple w ho ca me to

cha rges w ill gro w by an add itiona l FF 200 milli on in 1997.

celebra te his yo ungest daughter 's birt hda y at th e Disneyla nd" H otel a nd w ho wish es to know how we can

Furtherm or e, th e gene ra l context of red uced tourist spend ing, the strength o f the Fre nch franc relati ve to

co ntinue to im prove th e qua lity of our services; M r. Jordan 's concern on th e evo lution o f o ur lease a nd

othe r curre ncies and th e pri ce sens itivity of our produ ct a re not allow ing us to increase prices.

financia l charges an d fina lly, M r. Conrad's wish to have mo re infor mat ion on our develo pment pro jects.

Faced wi th th ese ch allenges we co nt inue to develop, Mr. Conrad, in pa rtnerships wi th investors and

Let us ta ke a loo k at 1996. Borrowing a phrase from the world of rugby, your company has converted

we ll-k nown brand nam es. We will thus be a ble to increase the va lue of our site and genera te some

the try it sco red in 1995 . As a ma tte r of fac t, our resu lts demonstra te a remarkable co ntin uity wi th those

additiona l inco me wit hout add ing to our debt.

of the preceding fiscal year. As in 1995, our volumes, our revenues and our net income are up . With 11.7 million guests and 72 % hotel occupancy, Disneyland Pa ris has reinforced its position as the number one paying to uris t des tina tion in Europe. \Vh at is more, by attracti ng mo re guests between the months of

The expansion of Disney Village is already well on its way, as is the co nstruction of a second interna tional co nve ntio n cen rer planned to open a t the end of 1997. An innovative, high quali ty shopping center, th e backbone o f a future housing and bus iness center, has been approved by local and national authorities and should open in th e year 2000.

Octo ber a nd Ma rch, th ose vo lu mes a re mo re eve nly spread th rough out th e yea r. As a resu lt, we have been

Fo r th e time being, we a rc goi ng to co ncent rate on wh at we do best : ent ert ai nme nt . Th e cele bra tio n o f o ur

a ble to dimin ish th e im pact of seasona l fluctu a tion s on our bu sin ess.

5th a nn iversa ry, incl ud ing 36 5 da ys of festivities a nd a

Co nsequent ly, reven ues increased 9% to FF 5 billion, in spite o f a to ugh period for th e Frenc h to uri st secto r. Particul arl y pleasin g is th e 55'Yo increase of our incom e befor e lease and finan cia l cha rges . Our net incom e also imp ro ved by 77% to FF 202 milli on despite a marked incr ease in finan cial charges in line wi th the 1994 fina nc ial restructur ing.

w hirlpoo l of event s w ill lea ve yo u brea thless. Even if we ha ve almos t reached th e age of reason , we retain th e esse nt ia l goa ls: to exc ite, to a m use and to conti nua lly imp rove our service to th e guest.

These results endorse th e ma rk et ing a nd sa les stra teg ies whic h we put in place tw o years ago. Close to 50 million guests have visited D isneyla nd Pa ris in less tha n five years ! I believe th is dem on str at es our capacity to create and develop a considera ble flow of to uris ts. \X' ha t an asset for the future ! First of all because those millions of gues ts a re ou r best ambassadors. Secondly, because the great majority of th em intend returning to Disneyla nd Pa ris. And they do come back in ever increasing num bers. In 1996, nearl y 30% of our gues ts were here for the second or third time, if not mo re. T hey kn ew that each time they would find new shows, new parad es a nd th e sa me ent husiasm on the pa rt of our cast members.

~i1iPpe Bourguignon

C ha irma n a nd Chief Executive O fficer

We ha ve given o ur cas t th e mea ns to better serve our gues ts a nd impro ve th e qu a lity o f o ur ser vices still further. A series o f measures suc h as cutti ng out layers of manageme nt delegating respon sibility dow n to th e opera ting level, renderi ng work ing hours mor e flexi ble, inc reas ing investm ents in training and setting up pro fit-sharing schemes a nd a co mpa ny sa vings plan have a llowed us to improve working conditions a nd our ca st member s' moti vati on . Mr Tepik, thi s is th e wa y in wh ich we will increase our guests ' sati sfaction even more. Ou r progr ess has a lso been recognized by o ur pee rs, fo r th e qu ality o f our ser vice, wh en we we re elected number one co m pa ny by the pro fession a ls o f the to urist secto r in a recent sur vey.

4

5

MANAGEMENT TEAM

DISNEYLAND®PARIS is... the Theme Park and seven themed hotels ...

Gilles C. Pelisson President and Chief O perating Officer

Jeff Archambault Vice President, Th em e Park

+

+ A ma jor eco no mic player

Fro nricrland, Discovcr yland , Fanrasyland, Ma in St ree t U.S.A .

in Fra nce,

p ro viding 4 0, 0 0 0 d irect and indirect jobs

+ 4 0 attracti on s of w hic h 80 %. arc cove red

+ A site of nearl y 2,000 hectares

(a pp ro x ima tely 4 ,80 0 ac res) a t the hea rt o f Europe

+ Attractive Prices: High Seaso n • Ad ults • C hild re n

+ Th e leading Theme Park in Europe

+ Th e 8th hotel group in France

+ A maj or player in specia list

retai ling with 49 boutiques, se lling 21 million articles per annu m, fea tu ring 30,000 references, of w hic h 93 % a t less th an FF 10 0

+ O ne of th e top 10 ca te ring g ro ups in Fra nce w it h 60 o utle ts se rv ing 25 m illion meal s in 19 96 .

+ ~

++

+ 1 1.7

milli on vis itor s in 19 96 , 32,000 per day o n ave rage, up 9 % o n 19 95

+

l ea rly 50 milli on visi tors since O pe ning Da y.

Christian Perdrier Vice Presiden t, H ot els

Th e Victori an lux ur y Disneyland Hotel , a t the ga tes of th e Pa rk, Hote l New York, t he Buzz of t he Big Apple, Newport Bay Club, Ocea ns of ew England Fa ir,

+

Sequo ia Lodge, yo ur Yosc m ire M o unta in Retr eat,

+

Hotel Cheyenn e, a W ild \'(fest Ad venture,

+ + + + + +

++

Hotel Santa Fe, a ll th e Fun o f t he Fiesta, Da vy Cro cke tt Ranch, a pri vat e Log Ca bin in t he Wood s,

+

+

+ Over 1 .5

mill ion occ u pied rooms in 199 6 with a n av era ge of 3 peopl e per room , for a 2-ni ght stay ,

+

+ 6

FF 150 FF 120

rooms in 7 rhcm cd hot els:

+

+

+

• Adu lts • C hildren

+ A hotel co m plex o f near ly 5 ,800

.+ +

FF 195 FF I SO

Low Seaso n

+ Disney Village, an exciting

ente rta in ment centre o pe n until th e ea rly hours of t he morning

5 lands: Adv enr u re la nd,

+

+

+6

m illion occ upie d roo ms since O pe ning Da y.

+

MANAGEMENT TEAM

A wealth of guests from all over E U R 0 PE, generating important revenues served by a truly international team and anoutstanding transport infrastructure

Bertrand Gaillochet Senior Vice President, Mar k etin g & Sales

Xavier de Mezerac Chief Financia l O fficer

+ 11.7 million visitors in 1996

1996 + FF 1.9 billion of purchasing of goo ds and services fro m ove r 4, 000 suppliers in 1996 + 20 % of tou rism currenc y exchange tran sactions in the Paris region + O ver FF 4 million of cash tr an saction s per day + Leading edge information system s pro vidin g real time track ing of flow s at Disneyland" Paris + 150,000 shareholders aro und th e wo rld. + FF 5 billion o f reven ues in

+

of w hich 4 1% French, 20 % Belgian and Dutch, 15 % Ger ma n, 10% British and 5 % Spanish and Ita lian, + More than 30 % of the Paris reg ion

residents and over 17 % of the French have been to Disneyland Paris at least once. + 84 % were very or to tall y sa tisfied with th eir visit,

+ 97 % wi ll recommend their friends to come, + 30% o f o ur Guests in 1996 ha d alrea dy visited to Disneylan d Par is.

Michel Perchet

Dominique Cocquet

Senior Vice President, Cast Members, Product and Q uality

Vice President, Real Estate and General Secretary

ea rly 8.000 permanent employees, 4.000 seasonal employees recruited eac h yea r

+ 35 trains per day arriving at th e ga tes of th e Park, fro m all ove r Fran ce, Lond on and Brussels, -+- A dir ect link to Par is in 40 minutes with the RER (Regional Express Train). + The A4 motorway provid ing th e East/Wes t link from Paris to German y; + Th e " Fra ncilienne" Paris circular, linking up all th e motorways int o Paris, and pro vid ing direct access to Orly and Cha rles de Ga ulle a irpo rts ; + 1.300 hectares of land aro und Disneylan d Par is to be develop ed. M ajo r to ur ist and ur ban development proj ects by th e yea r 20 00.

+ 800 different skills +

An int ernation al team with 50 nationalities rep resented (67 % Frenc h and 33 % othe r nati on alit ies)

+ An average age of 29 years

+ An inte rna l uni versi ty w hich provided 37,000 days o f tr aining in fiscal yea r 1996.

+ +

+

+ + +

+

+

One spectacular reason after another for visiting the PARK

The Fairy Tale Festival Fro m J a nua ry 8 to April 4 , 19 96, D isneylan d Paris paid tribute to the g rea t authors of Europea n fair y ta les as it revived t he mo st enc ha nti ng ones for th e jo y of a ll our visitors: fro m th e da ily encha nted weddin g o f Sleep ing Beauty with her Pri nce in front of th e Castle, to Ha nsel

In o ur attempt to sha re th e magic of Di sn eyland" Pari s w ith o ur gues ts 365 d ays a yea r, w e do eve ry t hing we possibly ca n to give th em o ne spectacula r reason after a no t he r for visitin g the Park . Winter or Summer, th ere is a lway s something new to see and do, a w ay to discover or redi scover Disneyland Pari s. It is th e minute detai l of th e sho ws d epicting th e ch aracters of the D isn ey film s that sets Di sn eyland Pari s apart from its co m pe tito rs.

a nd Gre rel's a ut hentic gingerbread hou se built in Fanrasy land, everyt hing wa s th er e to please yo ung and o ld a like .

entertainment artists

14 HOURS O~ SHOW PRODUCTION PER DAY ON AYERACE

COST UMI N G C AS T M EM BE RS

Parades 425 Cast Members and 52 different floats

THE

Wil~ West FE~TIV~l

F rom Ap ril 12 to June 2 3 , 1996 , Frontierla nd clothed itself in th e at mosphe re o f a littl e pio neer to w n. Ever y morning, o ur gu ests we re gree ted by authentic Cow boys and true Indians who lead th em, al ong with th e " Howdy Main Street" parad e, to th e gates of Fort Co rnsroc k. T hro ug ho ut th e da y, every o ne had th e op po rt unity to disco ver a nd a d m ire t he picturesqu e as pec ts of the Wi ld West rustic life: spa rks flying as t he blacksmith

d iff er e nt e nter tdi nment c oS t(JmeS 10

hammer ed out his horseshoes, revolv er sho oting, whip crac k ing a nd lasso dem on strati on s, mu sic, mim e, tr aditi on al d an ces and songs...

I I

Toy Story Parade From April to Septe mber 1996, child ren participated in the first interact ive parad e ever, o n M a in Str eet USA, as a nima ted to ys inv ited the publ ic to join in the party in a ha ppy cele bra tion where ever yo ne becam e part of th e wonderful wor ld o f To y Sto ry.

Pocahontas ~how

+

+

Fro m M ay 16 to September 8, 1996, o ur visitors had th e exclus ive o ppo rt unity to atte nd th e Pocah o nt as show o n th e C ha pa rra l Stage a t Frontierl and . T he decor, the heroes, th e ac tio n... a ll the det a ils were there to give eve ryone the illus ion th ey were tak ing part in th e shooting of an authent ic film.

PL~'''~'f

"O

+

+ + +

OoD

LL"c l996 ~ saW th e o pening\-\o\\yWOOO at

1er 0 \ 0 pl anet 1'he sum~ e of th e secon b Sylvester Disney \/l\\ag ce sponso reo Y ce Wi\\\ s, rer Bru in Fra n . lo Sch warzenegg ~ th e highly restaurant 1\rn o D ar01eu , e -l Geraro ep . orO time . Sta\\on , . M ore an u teO \\1 reC l D em 0 . . waS co nstrUC estigio US . l olhce ' l m ost pr orig1na e r th y of t 1e 000 squ a re meter co r wo W ith a oe 0 legenoS, th e 2, . . l fo recasts. lna f \-\o\\YWOO oe O itS o n g o h aS e)(Cee restaurant

++ + + + +

+

+

+

+

+

+

+

SHAREHO"LDER

SERVICES

As strengthening relationships with shareholders is a top priority, Euro Disney S.C.A. has created several communication tools: + The Shareholders' Club + A "Minitel" information service (France only) + Compuserve connection

+

+

+ +

+

++ + + +

+ ; IJ S UII S I D IA IUES

CONSOLIDATED

FINANCIAL

STATEMENTS

CONSOLIDATED BALANCE SHEET Se p te mb e r .1 0 . N o tcs"

[FF in million..)

19 9 6

19 9 5

94

116

199 4

Fixe d Assets Int angible asset s

145 ,

Ta ng ib le ass ets

3

3050

3039

.)

140

Lon g-term receiva bles

4

9 514

9 525

9 56S

12 658

12 680

\2 853

5

180

166

184

Tra de

6

291

270

27 1

O rher

7

526

402

763

8

9 13

799

899

3 16

308

308

2 226

945

24 25

382

4 10

448

IS 266

15 035

IS 726

3 X25

3 S25

887

2 S 18

( 1(2 )

( I 147)

C urrent Asse rs

Invent o ries Acco unt s receivable:

Shorr-re rm investments Cas h

Defer red Cha rge s

9

To ra l Asse rs Shareho lde rs' Eq uity Sha re ca pita l

10

3 827

Share pr emium

10

888

Accum ularcd ea rni ngs (deficit)

10

98

I

58 13

5 6 10

5 4%

Bo nds Red eem abl e in Sha res (" O RAs ")

11

I 002

I 002

002

Pro visio n s fo r Risk s and Ch arges

\2

25 1

379

392

Borrowi ngs

\3

6 .B I

6 3 \0

66 ll)

Pa ya ble to relat ed co m pa nies

\4

179

156

77

Acco unts pay ab le a nd accr ued lia bilities

15

I 358

3 14

X5 3

I 537

I 470

930

332

264

228

15 266

IS 035

15 726

C urrent Liabil ities

Defer red Reven ues To tal Sh are ho lde rs' Eq u ity and Lia bi lities ::'Sl'l'

24

Eun o

l'\tl tl'S t o

16

Con so lid.ued lin an cinl Sr.u vrn cnts

D IS i' E )' S.C. /\ . A:-: Il S UI', S IIl IAIUE S

rl

CONSOLIDATED STATEMENT OF INCOME (FF in millions)

N o tes ,.

Ye a r e n ded Se p te m ber .1

0 ,

19 9 6

19 9 5

' 994

4 96 8

4 572

4 147

41

95

114

5 009

4 667

4 261

I , 18

(4 244)

(4 105 )

(4 106 )

17

(41)

(95 )

( 11 4 )

72 4

467

(428)

(2 85)

(889)

Financia l incom e

302

309

538

Fina nc ia l cx pe nse

(442)

(4 89)

(972)

(568 )

(46 5 )

( 1 323)

Revenu es T heme Par k a nd reso rts Constr uctio n sa les a nd related services

17

Cosrs a nd Ex pe nses T heme Par k a nd resorts Cos t of co nstructio n sa les a nd related se rvices Inc om e Befo re Lea se and Fina nci al Charges Lea se renta l ex pe nse

25

Inc om e / (Los s) Before Ex cep tio nal Irem s Exce ptio na l inco me / (loss) , ner Ne t Inc ome / (Lo ss)

19

41

156

2

( I 282 )

46

112

(5 15)

202

114

( I 797)

"Sl't' NO Il' ''' t o Co nso lida ted Fina ncia l Starcmcnrs

E U llO DI ~ N EY

S.c.r\.

A N D S U II S II J I AR IES

2.5

CONSOLIDATED STATEMENT OF INCOME 199 6

Year e nd c d S e p l e m b e r .1 0 19 9 5

4 96 8

45 72

4 147

41

95

11 4

5 009

4 667

42 6 1

I , 18

(4 244 )

(4 105 )

(4 106)

17

(4 1)

(95)

( 11 4 )

724

467

(428)

(28 5 )

(889 )

Financia l incom e

30 2

309

538

Finan cial ex pe nse

(442)

(4 89)

(97 2 )

(568 )

(465)

( I 323 )

N o tes

(FF in mill ion s]

1;-



' 994

Reve nues T he me Pa rk a nd resorts Co ns t ructio n sa les a nd rela ted se rvices

17

Cos ts and Ex pe nses T he me Par k a nd resorts Cost o f co nst ruct io n sa les and related services Inco me Before Lease and Financial Charges Lea se rental ex pense

25

Incom e / (Los s) Before Exceptio na l Item s Excep tio na l incom e / (loss), net Net Inc om e / (Loss) '"' St.'l· :\'() [l.'~

[0

Co n-o lida n-d Fina ncial

19

41

156

2

( I 2 82 )

46

11 2

(5 15)

202

114

( I 797 )

St ;l(l.·I11 l'IH ~

E UR O

D 1S:->EY S.C :\ .

A:W

Su a s io L\ l tl ES

25

CONSOLIDATED

FINANCIAL

STATEMENTS

CONSOLIDATED STATEMENT OF CASH FLOWS N o tes"

(FF in millions )

Ca sh Flow s from/ (uscd in ) Operating Activiti es

Year end ed S epte mher .I o , 19 9 5 199 4

19 9 6

311

308

7

38

(1 422 )

Cas h Flow s from Investing Activities: Proc eeds from the sa le of tangible fixed as sets

(256)

Ca pita l expe nd itu res for tangibl e fixed asse ts

(1 71 )

(2)

Inc rease/(decrease) in defe rred charges

( 13 )

Increa se in int an gibl e asset s

9

Decr ea se in lo ng-term recei vab les Ca sh Flows fro m/ (use d in ) Inve st in g Acti viti es

1 44 7 (7 97) 37

(8) 42

(255)

(99)

( 100 )

(3 11)

(20 ) 48 715

Cas h Flows from Financing Activities : Repurcha se of Co nve rti ble Bonds

13

Ne t proceeds from issuance o f new sha res

2

5 776

Pro ceed s fro m issu an ce o f ORAs

2

I 00 2

Proceeds from sale of inte res t rate hedging inst ruments Prep ayment o f borrowings

22 2 - 13

( I 54 9) 100

Incr ease in bo rrowings Repayment of interim fina nc ing

2

Incr ea se in loans to Financing Co m pa nies

2

Decr ea se/ (increa se ) in debt secur ity dep osit

59

4

700 (6 98) (4 2 27)

, .)

2

(2 94)

-I

O ther Ca sh Flows from/(uscd in ) Financing Acti viti es

66

(3 0 9)

710

C ha nge in Cash a nd Cash Equi val ents

122

( 10 0 )

3

Cas h and Cas h Equiva lent s, begi nnin g of per iod

10 7

I 20 7

1 204

C as h and Cash Equivalents, end o f peri od

229

1 10 7

1 20 7

202

114

( I 7 97)

Ad justments to reconcile Ne t Inc om c/ (Lo ss) to et C ash Flows from Operati ng Acti vitie s: Ne t Inco me/(Lo ss) Add ba ck/Isubtract ] Dep reciati on an d a mo rt isa tio n

18

270

26 5

Ga in o n repurch a se of Co nve rt ible Bonds

13

( 15 )

(84)

Red uc tion in carrying va lue of certa in as sets Payabl e fo rgiven ess

291

1 20 6 2

( I 208) 66

O t he r

76

61

Cha nges in : Recei vab les

( 145 )

359

262

Invento ries

( 15 )

18

37

Pa rabl es a nd o the r acc rued liabiliti es

(5 2)

(440)

3 11

308

3 18

33 4

554

93 1

5 713

Cash Flows from/(used in ) Operating Activiti es

(27 4 ) (1 422 )

Supp lemental C ash Flow In forma tio n: Int erest pa id No n-cas h Fin ancing Activities: Offset of accum ulated sha re premiu m agai nst accu m ulated def icit "See No tes to Consolidated Financial Stat ements

2. 6

EUHO

DI ' NE\'

S.C. l\.

AN Il SU I\, l l l !A IU ES

10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1

Description of the Business and Summary of Significant Accounting Policies Description of the Business

Euro Disney S.C. A. (the " Compa ny" ) a nd its wh olly-own ed subsidia ries (co llectively, th e " Grou p " ) co mmenced o pera tio ns o n Apri l 12 , 1992 , w ith the off icia l opening of Disneyland Paris. T he Gro up o perates the Disneyland Pa ris Reso rt , which include s th e Disneyland Pa ris T heme Pa rk (t he "T heme Park " ), seve n rherned hot els, th e Festiva l Disney ent erta inment ce nt re, rena med " Disney Village", and a go lf co ur se (co llectively, th e " Resort" ) a t M a rn e-laVallee, France. In ad di tio n, th e G ro up manages the rea l esta te develop ment and expansion of the relat ed infra struct ur e of th e prop ert y. Th e Gro up o wns th e Disneyland Hot el, Davy C rockctr Ran ch, go lf co urse a nd la nd fo r th e hot els a nd leases th e Th em e Pa rk a nd Phase IB Facilities fro m Eur o Disney Associes S.N .C. (" EDA SN C " ) a nd th e Fina ncing Co mpa nies (see term s defined below ). Th e Co mpa ny, a publicl y held French co mpany, is o wned 39 % by ind irect, wh o lly-own ed subsidia ries of T he Wa it Disney Co mpa ny ("T W DC") at September 30, 1996 an d 1995, and ma nage d by Eur o Disney S.A. (the Company's Gera nr), a n ind irect, 99 %-owned subsidiary of TWDC. Entities included in the consolidated financial sta tements and their primary operations/activities are as follows : ~';'

C o m pa n y

of control

and ownership

Euro Disney S.C.A .

P rim a r y

0

per a ( i n g a c ( i v i t y

Operator of the Theme Park, Disneyla nd Ho tel, Davy Crockerr Ranch and golf course, and ma nager of real estate developme nt 99.9

Operator of the Phase IB hotels and Disney Village entertainment centre

99.8 99.8 99 .8 99.8 99 .8 99 .8

Special pur pose leasing com pa nies, all subsidiaries of ED L H o tels S.C.A ., which were crea ted in connection w ith th e leasing a nd financing of t he Phase IB Facilities

ED L Services S.A.

99. 8

Management compan y of th e Phase IB Fina ncing Co mpa nies

ED L Hin d s Pa rticipa rion s S.A.

99.9

Gene ra l Pa rtn er of EDL H otels S.C.A ., ED Reso rt S.C.A ., ED Reso rt Services S.C.A.

Euro Disney Vaca nces S.A.

99.9

Tour operator that sells holiday pac ka ges to th e Disneylan d Paris Reso rt , pr incip ally to guests fro m Germa ny, Ita ly an d T he Ne therla nds

99 .9

Spanish subsidiary of Euro Disney Vacances S.A.

99 .8 99.9 99.8 99.9

Companies created for anticipated second phase financing

EDL Hotels S.C.A . Ce ntre de Divert issement s S.A. Newpo rt Bay Clu b S.A. C heyc nne Ho tel S.A. Hotel Ne w Yo rk S.A. Seq uo ia Lod ge S.A. H ot el Sa nta Fe S.A.

Euro Disney Vacaciones S.A. Euro Disney Finance S.A. ED Reso rt S.C.A . Val d'Europe Pro motion S.A. ED Resort Services S.C.A .

S.E.T.E .M .O. Imagineering S.A. R.L. 100.0

ED Spec ta cles S.A.R.L.· Debit de Tabac S.N. C.

80 .0 100 .0

Studies and supervision of construction for the new attrac tions of the Th eme Pa rk added after Opening a nd the possible second theme pa rk Operator o f Buffalo Bill's Wild West Sho w To bacco reta iler at Disney Village

• Included in the consolidated financial srarcmcnrs since 1995.

b i RO DI,:-: EY

S.C. A. .vx n

Il ID I.\RIE

2.7

CONSOLIDATED

FINANCIAL

STATEMENTS

Phase I Financing The Gro up origi nall y ha d va rio us arrange me nts wit h Euro Dis ney lan d S.N .C. for t he fina nci ng of Ph ase lA, a nd with the six co m pa nies (" SN Cs ") rh a r were esta blishe d for the fina nci ng of Ph ase IB of th e Disn eyland Pa ris Resort (the " Phase IB fi nanci ng C o m pa n ies") , as described below. As pa rt of the fin anc ia l Restructu rin g (see No te 2 ), t he Com pa n y cance lled its origi na l arrangeme nt wit h Euro Di sncv land S.N .C. an d esta bli she d certai n new arra ngeme nt s with res pect to subsrunrial lv all of the T hem e Pa rk assets wi th EDA SN C, an indirect, wholl y-owned affilia te of T\,\ 'D C, as furth er descr ib ed be low. The G ro u p ha s no o w ne rship int erest in these SN Cs. Refer ence to the "Financing Co m pa nies or SN Cs " incl udes Eur o D isneyland S. N .C. a nd th e Ph ase IB financin g C o m pa nies.

Phase lA

In N ove m be r 198 9, var io us ag reement s we re s igne d be twee n th e C o m pa ny a nd Euro D isneyla nd S.N. C.

for the deve lop me nt an d fina nci ng of the T he me Par k. Pu rsu a nt to a sa le/ lea se back ag ree me nt , a ll of th e asse ts of th e T heme Par k were so ld by th e Com pa n y to Euro Disncylau d S.N. C. and wer e being leased back to the Co m pa n y. As part of th e fi na ncia l Restructuring (see Note 2 ). a ne w leas ing structure wa s im p lemented a nd th e or igin a l lease w ith Euro D isn eyland S.N .C. wa s ca ncelled . Under th is new lea se struc tu re, Euro Di sne yland S.N .C. is leasin g sub sta nt ia lly all o f the Th eme Park asset s to ED A SN C, which in turn is su b leas ing the Theme Park asset s to th e C o rn pnny, In a d d itio n, pur sua nt to

.1

sa le/ lea se back agree ment (sec Note 2 ), certai n o t her asse ts of t he Them e Pa rk

were so ld bv th e Co m pa n y a nd Eu ro D isneyland S.N .C. to EDA SN C

.I S

part of the Fina ncia l Rest ructu ring, a nd a re

a lso being leased back to th e Co m pa ny.

Phase IB

In M arch 19 9 1. variou s ag ree me nts w ere sig ne d for th e development a nd fin an cing o f five hotels a nd

th e Di sn ey Village ente rta inme nt ce nt re (the "Ph ase IB Facilities" ). Pu rs ua nt to sa le/ leas e ba ck agr eem ents. th e Ph ase IB fa cil iti es were so ld b~' the C o rn pa uy to th e Pha se IB Financin g Co m pa n ies a nd a re being lea sed back ind ir ectl y t hrough specia l purp ose leasi ng companies to the operator, ED L H otels S.C.A.

Other

NeW/JO lt Conv ention Cen tre

In M a y 1996, var io us agree me nts were sig ne d fo r th e dev elopment a nd fina nc ing of

th e Ne w po rt Conve ntio n Ce nt re. Pursu ant to sa le- lease back ag ree me nts , the asse ts of th e N ew po rt Con ventio n C ent re, w h ich a re currently und er constructio n, are sol d as rhev are co nstructed by EDL Ho te ls S.C. A. to Ce nt re de C o ng rcs N ewpo rt 5.A.S. ("Cent re SAS " ), a n indi rect w ho lly-ow ned affi liate o f TWD C a nd w ill be lea sed back to th e o pe ra tor, EDL H otels S.C.A.

Summary of Significant Accounting Policies

Basis of Preparation

T he Gro up 's con so lidated fin a ncial sta te ments a rc pr epared in co nfor mit y wit h acc o unti ng

p rincip les gene ral ly accepted in France, a nd incl ude th e acco unt s of Euro Di sne y S.C.A . a nd its su bsid ia ries . All significa nt intercompan y ac co unts and tr an sacti on s ha ve been elimi na ted .

Fixed Asse ts

Intangible asset s co ns ist of softwa re cos ts a nd licen see rights and are ca rried a t cos t. Am orti sati on

is computed o n th e st ra ight-line meth od o ver tw o to ten yea rs . Tan gibl e fixed asset s arc carri ed a t cos t. Depreciati on is computed o n the stra ight-line method based up on es tim a ted useful lives, as fo llows: Bui ldin gs

20 to 33 yea rs

In fras tru ct u re and leaseh ol d improvements

1() to 33 years

furn iture, fix tu res a nd equi pme n t

4 to 10 years

Inte rest cos ts incurred fo r th e co nst ruct io n of tan gibl e fixed ass ets a nd th e acqu isiti on and development of land a re cap itali sed. Pro ject s under dev elopment a re capitali sed to the extent technica l and economic fea sibili ty ha s been es ta blished.

Leased Asse ts

The G ro u p lea ses a s ign ifica nt porti on o f the Them e Park and Pha se IB faci litie s. Pur sua nt ro

o ptio ns a va ila b le under Fre nc h ac cou nt ing principles, th e G ro u p ac co unts for th ese tr an sactions as o pera ting lea ses.

2.8

E U R O DI S N EY S . C .A . A N D S U IIS IIl IA IUE S

.

Debt Issue Costs

Di rec t co sts of the issuan ce of deb t ar e capi ta lised a nd am ortised o n a stra ight- line basis o ver

th e life of the related debt. Upon co nversio n of the co nvert ib le debt, th e pr o rata am ount of un amortised issu e costs is offset ag ain st the sha re premiu m ari sin g from the issu an ce of the rela ted sha res , a nd upon repu rcha se and/or re tir em ent, a pr o ra ta a mo unt o f th e un am o rt ised issue cos ts is expe nscd an d included as part of th e ga in or lo ss resulting from the transacti on.

Adve rtising Costs lnu entories

Advertising costs a re ex pense d as incu rred .

Invento ries ar e stated at the lower o f cos t or market va lue, on a weighted a verage CO ~ 1 basi s.

Costs and expenses

The principal co m po nent s of Theme Park a nd resort costs and ex pe nses include direct

operati ng costs, marketi ng a nd sa les expenses, general a nd ad mi nistra tive ex pe nses, depreciati on a nd a mortisatio n . D irec t opera t ing co sts includ e operating wa ges and emp loye e benefits, and cost of food, beverage a nd mer chandi se sa les and o ther co sts s uc h as utilities, maintenance, insurance a nd o pe ra ting ta xes.

Cash and Cas h Equiualents

Cash a nd ca sh eq uiva lents co ns ist of ca sh o n hand a nd sho rt-term inve stme nt s wi th

ori gi na l rn nruriries of three months o r less. Short-ter m investm ent s ar e sta ted a t the lo wer of co st o r market va lue.

Earnings per share

Earnings per share o f common sto ck is compu ted on th e basi s of the weighted av erag e number

of sha res o ursra ndi ng dur ing the fisca l year. In com e Taxes

Th e G roup files a co nsol idated tax ret urn. Th e Gro up provides for deferred income ta xe s on

temporary d ifferences between financia l a nd tax rep orting. The Group uses th e lia bility method und er w hich deferred ta xes are ca lcu la te d a pp l ~'i ng legislated tax rates ex pected to be in effect w he n th e tempo ra ry di ffer en ces w ill reverse.

Part icipant Reuenu e

fee s bi lled to companies (" Pa rt icipa nt s") w hic h ent e r into long-term marketing agr eements

w ith the G ro u p for th e spo nso rs hip of attractions are reco gnised as revenue rat eably over th e per iod o f th e appl icabl e ag reements com me ncing wit h rhe opening o f th e a ttractio n.

Convert ible Bond Redemption Premium

Th e liability for th e convertible bond red empti on pr emium is pro vid ed

fo r o n a stra ight-line ba sis o ve r the term o f th e bonds, depending o n th e pr obability th a t t he prem ium will be pa id .

Finan cial lnstn nncnts

In th e normal co urse of bu sin ess, the Gro up em ploy s a var iety of o ff-ba la nce-sheet finan cia l

instruments to mana ge its exposure to fluctu ati on s in int eres t and foreign currency exc ha nge rates, includ ing interest rat e swa p ag ree me nts , forward rate agree me nts, coll a r agr eements and fo reign curren cy fo rwa rd exc ha nge contracts . T he Group de signa tes interest ra te ins truments as hed ges of debt o bliga tio ns, and accr ues the differenti a l to be paid o r received under the agree me nt s as int erest rates change o ver th e lives o f th e contracts. Ga ins and lo sses a rising from fo re ign c urrency ins truments ar e defer red a nd recogn ised in inc om e as offsets of gains an d losses resu lt ing fro m the und erly ing hed ged tran saction s. T he Group co nti nua lly monito rs its positio ns wi t h, a nd th e cre di t qual ity of , the financi a l inst itutio ns w hich a re counrerpartics to its off-ba lance-sheet financial ins trum ents and d oes not ant icipate non -performance by th e co unrer pn rries . The G roup w ould not reali se a mat erial loss in th e event of non -p er forman ce by co unre rp nrtics. T he Group exclusivel y enters into off-bal ance-she et tran saction s with fin ancia l inst itution co unrerpa rries wh ich ha ve a n IBC A lon g te rm c red it rat ing o f single A - o r be tter (o r eq uiva lent rati ng fro m another g lo ba lly recogn ised c red it ratin g agency). The G ro u p est ima tes th e fair va lue of its fin ancial instru me nt s. The method used a nd va lues obtai ned are ex plai ne d in the notes related to th e specific fina ncia l ins tr uments (see Notes S, 22 a nd 2 8 ).

Foreign Currency Transactions

Transaction s den omina ted in forei gn curren cies are recorded in Fren ch fra ncs a t

the exchange rate prevailing at the month-end prior to the tra nsactio n dat e. Asse ts a nd liab iliti es den o m inat ed in foreig n c urre ncie s a re sta ted at th eir eq uiva lent va lue in French fra ncs at the exc ha nge rate prevail ing as of the balance sheet d at e. Net exc ha nge ga ins o r losses resu lti ng from th e tran slat ion of assets a nd liab ilities in fo reign curren cies a t the ba lan ce s heet date are defe rred as trans lation ad justm ents. Provi sion is made fo r a ll unrea lised exc ha nge losses to the exten t not hed ged,

E UI W

I) I S:-: EY

' ,C. A .

A1': 1J S UIl ~ IIJ IAR IE ~

2. 9

CONSOLIDATED

2

FINANCIAL

STATEMENTS

Financial Restructuring In J uly 1993, the Co mpany an no un ced th at it, together w ith TWDC, was engagi ng in a thorough revie w of the Gro up's fina nc ia l st ru cture. Subseq ue ntly, di scu ssions began between the Co m pa ny, T W DC, ce rtai n o f the fina nc ia l instituti on s a nd co mpa n ies th a t a re credi to rs o f the Co m pa ny (the "Lender s" ) a nd th e Fina ncin g SN Cs to ex plore a restructuring of the G ro u p's finances. On M ay 20, 1994, th e Co mpa ny, T \X1DC, the Fina nci ng SNCs a nd the Lenders executed agree me nts related to a fina ncial rest ructur ing (t he "Fi na nc ia l Rest ru ct ur ing " ) subjec t to sharehol de r a pprova l. At a n ex trao rdi nary ge nera l meeting on June S, 1994, shareho lders a pproved resolution s for t he Finan cial Restructurin g a nd by Aug us t 10, 1994, a ll agree ments rela ted to th e Fina ncia l Rest ru ctu ring ha d been executed. T he Finan cial Restructur ing was esse ntia lly co mp rised of co ncessions and co ntri butio ns mad e by th e Len der s a nd T \\fDC a nd th e pr ep aym ent o f ce rta in o uts ta nd ing lo a n ind ebted ness o f t he G ro up a nd th e Financing SNCs w it h the net proce eds of th e Right s Offering (define d below ). T he sign ifica nt co m po ne nts o f th e Finan cia l Restruc turin g a re set fo rt h below. Rights Offering, Use of Proceeds and other Capital Transactions

Issuance of new shares and use ofp roceeds

In connect ion wi t h th e Finan cial Restructu ring, th e Co m pa ny T\X1D C,

and the Lenders compl et ed an underw rit ing o f 595 m illion new sha res in th e fo rm of a right s offering (the "Righ ts Offering " ), the gross p roceeds of w hich we re FF 5,950 m illion . T W DC subscr ibed a nd pa id cas h fo r 49 % of th e R igh ts Offering. T he re mai ni ng 5 1% of th e shares were sold pursuant to an underwriting commi tme nt organised by the Lenders. Ne t proceeds fro m the Rights Offering a mou nted to FF 5,776 m illio n, af ter a pplicable issuance costs a nd ex penses. of w hic h FF 1,54 9 m illion w as use d to prepa y a po rtion of th e Co m pa ny's senior deb t a nd th e remaini ng p roceed s o f FF 4,22 7 mi llion were lo aned directly to Eu ro Disn eyland S.N.C. a nd th e Phase IB Finan cin g Co mpa n ies wh ich, in tu rn , prep aid o uts ta n d ing borrowings.

Distributio n of warrants to ex isting shareholders As part of the Financial Rest ructu ring, the Co m pa ny distrib uted 170 millio n warra nts to shareholders of record on June 14, 1994. One warrant wa s di stributed per share of common stock held, ena bling th e ho lders of suc h warrants to subscribe for one newly-issued sha re of th e Co m pa ny's common stoc k a t a pri ce o f FF 40 for every th ree war rants held . T he warrants ha ve a term o f ten years a nd ma y be exe rcise d be tw een Ja n uar y 1996 and Ju ly 2004 .

Capital reduc tio n

In connectio n wi th th e Financia l Restructuring , the Co m pa ny's share ho lders approved t he offset

of t he Co mpany's acc um ula ted deficit of FF 4,863 milli on as of September 30, 1993 aga inst existi ng share prem ium. In a dd ition, share ho lde rs a pproved th e reducti on of th e Co mpa ny's share cap ital fro m FF 1,700 m illio n to FF 850 milli on , by redu cin g th e nominal share va lue fro m FF l a to FF 5. T he sha re ca pita l redu ctio n o f FF 850 m illion w as reco rd ed to a spec ia l eq uity reser ve acc ount enti tle d " Rese rve - Reducti on o f Ca pita l" an d w as used to partiall y a bsorb loss es a rising in fisca l yea r 1994. Sub sequ entl y, during M a rch 1995, th e sha re ho lde rs appro ved ce rt a in fisca l year 1994 losses in ex cess of FF 850 mi llion to be a p plied aga ins t sha re premium ge ne ra te d by th e Rights Offering, wh ich resulted in a FF 93 1 milli on reduct io n of sha re pr emi um . Lenders' Concessions

Redu ction of interest paymen ts

In co nnectio n w ith th e Fina ncia l Rest ruct uring, the Len de rs agreed to wa ive

agg rega te inter est ch ar ges pa yab le by th e Grou p and th e Fina nc ing SNCs o n o uts ta nd ing de bt ha ving a net pr esent va lue as of October I, 1993 of FF 1,600 millio n (d isco unt ed at a ra te of 7.5 % fro m October 1,1 993).

Deform ! of prin cipal rcpa vn tcnts As part o f th e Financi al Restructuring, th e Lender s agr eed to defer fo r three yea rs fro m th e o rigina l du e dates principa l paym ents du e by th e G ro u p a nd the Financing SNCs on certai n o utst andi ng ind ebtedness.

.3 0

E UIW D I > " I, Y

S.c." .

A ' Il

Su g S 1Il l.\IU 1'5

• The Wait Disney Company 's Concessions and Contributions

Reduction of royalties under license agreement In connect ion with th e Fina ncia l Restructuri ng, T \X'DC ag reed to waive all royalties payable by the Company from Oc to ber 1, 1993 to September 30, 1998. Commencing October 1, 1998, royal ties will be reinstat ed at one-half the origina l ra te and beginning October 1, 2003, royal ties will be restored to th eir o rigina l ra tes.

Reduction of base managentent fees

As pa rt of th e Fina ncial Rest ructu ring, T\X'DC ag reed to waive base

man agem ent fees pa yabl e by th e Co mpa ny from October 1, 1993 to September 30, 1998. In add ition , T \X'DC ha s per ma nent ly waived base man agement fees paya ble for th e yea rs 1992 and 1993 . Co mmencing Oc to ber 1, 1998, base man agem ent fees will be rein sta ted at I % of total net revenu es and will escala te over time to a maximum o f 6 % on Octo ber 1, 2018. Th e am ount a nd paym ent of base mana gem ent fees are sub ject to cert a in limitation s.

Modifica tioll of ntanagetnent incent ive fees

Beginning October I, 1993, the formula used to co mpute th e man agem ent incent ive fees paya ble by th e Co mpany has been mod ified to reflect , o n an ongo ing basis, cha nges in t he asse t levels o f the Gro up a nd the Fina ncing SNCs.

Subscription for ORAs ill OnA offerillg T\X'DC subscri bed for 99.3 % of FF 1,000 million of subord ina ted obliga tio ns redee ma ble in sha res (O bligatio ns subordonnees Rernbo ursa bles en Act ion s) issued by th e Com pany (rema ining 0.7 % was subscribed by the public ). T hese O RAs have a face va lue of FF 400 per O RA, a term of 10 years, a one percent coupon per annum and will be redeemable at maturity into 25 million shares of the Company's common stock.

Provision of interim [inancing From January through March 1994 , TW DC pro vided FF 698 million of interim financing to t he Grou p while restructuring disc ussions proceeded. T his deb t was offse t agai nst amounts payable by TWDC in con nection wit h its subscription of O RAs, as descri bed above.

Cancellation of receivable As pa rt of the Financial Restruct ur ing, T\X'DC and certai n of its subsid iaries ca nce lled ex isting receivab les du e fro m the Co mpa ny of approx ima tely FF 1,200 million in respect of services rende red 111 co n nectio n wit h th e techn ical an d adm inistrati ve supp ort activities that were provided to the Co mpany

Salc/lcascbacl: of certain fixed assets EDA SNC agreed to purchase cert ain assets, prin cip all y Th eme Par k a ttrac tio ns for th eir boo k valu e o f 1-= 1-= l A billion. Th ese assets were subseq uent ly leased back to th e Co mpa ny by EDA S C fo r period o f 12 year s for a fixed a nn ual lease payment of FF 14 million und er th e term s describ ed in No te 25.

Provi sion of liquidity [acility TWD C agree d to mak e ava ilab le, up on requ est by th e Company, a subo rd ina ted unsecured FF 1, I00 mill ion ten -year sran dby revol ving cred it facility to th e Gro up which bears inte rest at a ra te eq ua l to t he 3- mo nth Par is Inrer ba nk Offering Rate (" PIBO R") . Repayments of amo unts drawn und er the faci lity will be deferred for so long as amou nts due and payable under the Phase lA, Phase IB or CDC Loa ns remain unpaid . As of September 30, 1996, the Co mpany had no t yet req uested T\X'DC to establish this facility.

Futu re dcuelopment fee p"y,cble to The \'(1alt Disney Company At such time as the Group launches a second phase of its development a t the Disneyla nd Par is Reso rt and commi tments for the necessary financing thereof have been obta ined, th e Co mpa ny sha ll pay T\VD C a develop ment fee equal to FF 1,2 00 million, subjec t to the cancellatio n of 38 .3 million of the warra nts issued to T\X'DC in co nnection wi th th e distri bution of warrants to exis ting shareholders. Concessions to Lenders and to The Wait Disney Company

Issuan ce of bonds with uiarrant s Th e Co mpa ny issued to th e Lend ers FF 2 mill ion of ten-yea r, subo rd inated bonds beari ng int erest at one percent per annum w ith warrants attached entitling th em to subscribe for 40 mi llion newly issued sha res o f th e Compan y's co mmon stock at a pri ce of FF 40 per sha re. Th e warr ants a rc exe rcisa ble fro m Janu ar y 1996 to Jul y 2004 .

E UR O D I S:\ E Y

S.C.A.

A:"U

U BS I D IA RI E

3I

CONSOLIDATED

jv!argills increase

FINANCIAL

STATEMENTS

The margins applicable ro variabl e int erest rare debt will be increa sed from October I. 1996 ro

Sep te m be r 30 . 2003 on rh c Pha se IA cred it fac ilirv and from O cto ber I. 1997 ro Septembe r 30 . 2003 on rhe Phase IB c re d it fac ilir y, b~' 0.2 75 'X, and 0.334 % per annum . res pe ctive ly, The net present value of these margin increa ses as o f O cto be r I, 1993 was uppro ximarclv l-F 50 million (d isco u u rcd a t a ra re o f 7.5 % ).

M odificatioll of debt covena nts

The financial Rcsrrucruring a greements include co vena nts w ith res peer ro the

restructu red financing a rran gem ents between the G ro u p and th e Lend er s as d escribed in No te 13 .

Neio Theme Park leasing structure

In connect ion with th e Financial Rcsrrucruring, the C o m pa n y entered into a

nc vv lease s tructure [or the Theme Park wirh Euro Disncyl nud S,N .c:. a nd EDA SN C (see N o te

3

25 ),

Tangible Fixed Assets T r a n vIc r v

Sept emh er 3 o , 19 9 6

(2 )

16

388

un

43

I 508

(25)

53

588

11

(28)

5

350

3 678

102

(63)

11 7

3 83 4

Co ns tr uctio n in p rogress

14 8

154

Acc umul ated depreciation

(787 )

(234)

Septe mhe r 3 0 • 19 9 5

Ad dilion,

Land and seco nd urv infra structure

359

15

Buildings

430

43

Lea seh old improv em ents, fur niture and fix t u res

J_/

- )~

33

O ther

36 2

(IT in milli on s}

Subroral

Dedu ctions

( 11 7 )

s- :)

185 (96 9) 3 050

3039

Tan g ible fixe d a sset s include capitali sed inr er esr cos ts of FF 205 mill ion ar Sc prcmhc r 30 . 1996 co mpa red to

Ff 204 milli on a r Septembe r 30. 1995 .

4

Lon g-Term Rec eivabl es Se p te m b e r .1 0. (FF in milli on s ]

1 t) 9 5

Euro Disn cylund S.N .c:. (a)

6626

662 6

Ph a se IB financin g Co m pa n ies (b)

25 6 1

2 5 61

32 7

33S

9514

9 5 25

O ther (c)

(a) Euro Dis neyland S.N.C.

Pu rsu ant ro th e original T heme Pa rk financing ug rec m cn rs. th e C o m pa n y p ro vid ed

lon g-te rm su bordi na ted lo an s o f Fl- 3,849 milli on ro Euro D isneyla nd S.N. C. . w hich was re d uce d ro FF 3,738 m illi on d ur ing 1994. As pa rr of th e f inancial Restructu ring. th e C o m pa ny also provi ded FF 2, 888 m ill ion ro Eu ro D isneyla nd S.N .C. in th e form of a s u bo rdi na te d lo an . Th e lo an s bea r interest ar PIIIOR w hic h. ar Sep te m be r 30. 1996. w a s

3.56 % . As parr o f th e Fin anci al Restructuring, in teres t c ha rge s o n the o uts ta nd ing bal an ce were reduced b~' 100 % durin g the seco nd ha lf o f fisca l year 1994 and pr o gr essively inc rea se throu gh fiscal yea r 2003 , Beginning in fisca l yea r 2004. th e appli cab le in terest rar e wi ll return ro pr e-r csrrucruring leve ls. Principa l payments on t he o rigina l ba lance of l- F 3, 738 mi llion co m me nce Marc h 3 1, 1999 and co nt in ue rh rou gh the yea r 20 15. Pri nc ipa l pnymc nt s on t he re mai ni ng FF 2,888 mi llion w ill begin Marc h 3 1, 1998 and continue rh ro ug h Se ptem be r 30 , 20 16. Ar September 30, 1996 a nd

.3 2.

E

1( 0

DI ~ =" E Y

S.C .:\.

J 995,

A7' t> S U B" ID I :\ JU I:5

th er e wa s no acc rue d int erest o n thes e lo an s.

(b) Phase IB Fina nci ng Companies lo ng- ter m su bo rdi na ted lo an s of

rr

Pur suant to th e original Pha se IB financing agreements, t he Gro up provided 1,4 5 0 m ill ion to th e Pha se IB Fina nci ng Co mpanies, w hi ch was reduced to

FF 1.2 2 2 mi llion duri ng 19 94 . As part of the Fin a ncia l Rest ructu r ing , the Company provided FF 1,3 3 9 million to t he Ph a se IB Fina nci ng Co mpanies and a t the same t im e modified the interest ra te to a fixed rate of 6 1Yt, on bo th lo an rra uch es. Also d ue to th e Fin a nc ial Rest r uct u r ing, interest charges on t he entire ou ts tandi ng ba la nce we re re duced h y 10 0 % dur in g th e seco nd half of fisca l year 19 94 a n d progressively increase th ro ug h fiscal year 20 0 3 . Begi n ni ng in fisca l year 2 0 04 , t he interes t ra te w ill return to t he fixed ra te of 6 I Yt r , Re pa ym ent of t h is ha lance co m me nces in 19 9 X a nd co nti n ues through 2 0 16 . At Se pte m be r 30, 19 96 a nd 19 95 , th er e w a s no accru ed inte res t o n t hese lo an s. (e) Cn her

Ot her co ns isrs p r im ari ly o f lon g term d e po sits. In a ccord an ce w it h certa in cond iti ons st ip u la te d in t he

Fin a ncial Restr uct u rin g , the Gro u p is requ ired to m a inta in a security deposi t as a p led ge tor t he benefit o f rhc Ph a se lA a n d IB lend er s. The deposit amounts a re interest bea ring a n d an: n ot ava ila b le to the Gro u p un til a ll o f the se n io r d ehr p ur s uant to t he bank d e b r a g ree me nts ha ve been pa id an d o t her o b liga t io ns by both th e lend ers and t he G ro u p ha ve been sa t is fied . At Septem ber 30, 19 9 6 an d 19 95 , th e dep osit a mo unts included ac cr ue d intere st o i FF 2 m ill ion a n d FF 4 mi llio n, resp ect ivel y,

5

Inventories S ep te m be r .I o , tFF in million",)

Xlc rc ha nd ise. iood a n d beverage Supplies

Allowance

6

19 9 6

' 9 95

115

II I

89

86

2 04

19 7

(2 4)

(3 1)

18 0

16 6

Trade accounts receivable T ra d e acco u n ts receiva b le a re d ue prim a r ily fr o m to ur o pera to rs, age n ts a nd travel gro u ps , ar ising fro m sa les of T heme Pa rk e n t ra nce rickets, hotel ro o ms a nd a m eni ties, a s we ll as b illin gs fo r Pa rt ic ip ant fees. At Se pte m ber 3 0, 19 9 6 a n d 19 95 , FF 25 mi llio n a nd FF 3 9 m illio n, respectively, w er e provid ed fo r porcntia lly uncol lccrihlc acco u nt s. A ll a m o u nt s a re du e within o ne yea r.

7

Other accounts receivable Se p te m be r .1 0 ,

199 5

VAT

33 2

222

Other

194

18 0

526

4 02

All amounts are d ue within one year,

8

Short-term investments Sho rr- re rm inv est m ents incl ud e m on ey m a rket ins t r u me n ts a nd cerri ficares of d ep os it, ca rr ied a t co st , which a p pro x im a te d m ar ket va lue at Se p tem be r 30, 19 96 a nd 1995 . At Sep te m be r 30, 19 9 6 , no a mo u nts w er e p ledged pursu ant to th e Gro u p's fin ancing a g ree m ent s as g uara n tees fo r fut ure co ns t r ucti o n pa ym ent s, la nd acq uisi tio n s, a nd ot her fina ncia l rra nsacri ons .

[ CRO D ' S:-." EY

S.c.;\ .

A:-."D SUB ' D' A RI L

CONSOLIDATED

9

FINANCIAL

STATEMENTS

D eferred cha rges S e p t e m b e r 3 0, (n: ill

l11 i11 iOI1'i )

19 9 5

Finan cia l conrrih uti on s to publ ic in frastructure (a)

35 4

334

O ther

('1) Fina ncial contributions to public iufrastntcture

48

56

3 82

4 10

T his p rim a rily co nsists of a paym ent o f FF 2 32 milli o n mad e

by t he Group to th e S.N .C.F. (Societe Na tio nu le de C hem ins de fer Franca is ), t he French nat ional ra ilway co mpa ny. as parr of its fina ncia l co mm it ment

to

the con stru ct ion o f the T G .V. (T ra in ~l C ru ndc Viresse) ra ilwa y sta tio n located

wi thi n the Resort. Th is contribution is being a mo rtised o ve r rwcn ry yea rs a nd co m me nc ed o n th e o pe n ing of th e TG .V. sta tio n in ;'\'lay 1994 . Cont rib ut ions to publ ic infras tr ucture arc sta ted net of ac cum ula ted am ortisati on o f FF 6 1 m illio n a nd FF 41 m illio n a t Septe m ber 30. 1996 a nd 1995 . rcsp ccr ivcly.

10

Shareholders ' eq uit y IFF in million..l

in mill ion v! S h a re Ca p i t a I

(IT (in t1w m.lI1J , )

S h a res

Balance a t Sep tem b er 30 , 1994

765 039

3 825

(FF in mill ion sl

S h ,H c P r C 111 i urn

E a r n i ng, ( D e f i c i t)

2 8 1S

( I 14 7 )

(93 1)

Reduct io n o f sha re pr emiu m

93 1 114

N et incom e Balan ce a t Septe m be r 3 0, 19 95

:\ ( c u m u l a t e d

76 5 039

3 825

1

SS7

( 10 2 )

Allocati on to Ge ne ra l Pa rtn er Exercise of wa rra nrs a nd emp loyee stock o ptio ns

(2)

2

3 20

Ne t Inco me Bal an ce a t Sep te m be r 30, 19 96

20 2 765 359

3 8 27

1 888

98

The n umber o f shares above, w hic h have a no mi nal val ue o f FF 5 pe r share. rep resent th e Com pany's issu ed an d o utsta ndi ng s ha res . a t the respect ive da tes. As pa rr of the Financia l Restru ctu ring, United Sa ud i Co m me rcia l Ba n k (" USC B" ) a nd its C ha irma n, Prince Alwa lccd Bin Ta la l Bin Abd u laziz AI Sa ud (" Prince Alw a leed " ), ex ec uted va rio us ag ree me nts a nd s uhscq ucnt ly acq u ired approxima tely 24 % of t he o uts tan di ng com mo n stock of the Co m pa ny or 1SS .5 mill ion s ha res . of w hic h 74 .5 mill ion wer e pu rch ased fro m ED L H o ld ing Co. , a n indi rect. w ho lly-o w ne d su bsid ia ry o f T \VD C. In OCto her 19 94 , thi s tr an saction red uced TWDC s percentage ow ne rs hi p in th e Co m pa ny fro m 4 9 'Y., to a pp rnxi ma rcly 39'){, . D urin g fisca l year 19 94 , th e Co rn pa ny used a FF 850 m illion reserv e acco unt resulting fro m the red ucti on in th e no m inal per s ha re va lue o f th e Co m pa ny's co mmo n stoc k to ab so rb a porri on of th e losses a rising in fisc a l yea r 19 94 . In fisca l yea r 19 95. th e rem ain ing fisca l year 1994 lo sses of FF 93 1 m illio n wer e a pp lied aga inst share pr emi um . At Sep te m ber 3 0, 19 96 , t he Co m pa ny 's acc um ula te d ea rn ings includ es a legal rese rve of FF 44 mill ion which is no t ava ila ble for di stribution . N o d ivid ends were paid relating to fisca l yea rs 19 96 , 1995 or 1994. Earn ings pe r sha re relat ed to fiscal yea rs 1996 a nd 1995 is as fo llo w s: 19 9 5

Ne t incom e (FF in m illio ns)

202

1 14

Average num ber o f com mo n s ha res o utsta nd ing (in m illion s )

76 5

76 5

0 .26

0 . 15

Ea rn ings per sha re (FF)

34

E U IW 1) 1' ;-': 1'.)' S . c. :\ . A NIl S U IIS IIl LlH IF S

11

Bond s red e emabl e in shares ("ORAs") As part of th e finan cial Rest ructu ring, 2, 5 0 0,1 2 1 O RAs each wi th a nomin al val ue o f FF 4 00 we re issued o n Jul y 11, 19 94. T he O RA s ha ve a coupo n o f I 'X, per a nn um a nd ha ve a ten -year term . Upo n matur ity, eac h O RA w ill be redee m a ble by th e issuan ce o f te n sha res o f th e Co m pa ny's co m mo n stoc k. T he a cc rued co upo n o n t hese O RAs a t Septe m ber 30, 19 96 was a pprox ima te ly Fl- 2 m illion .

12

Provi sions for risks and charges At Septe m be r 30, 19 95, pro vision s for risks a nd c ha rges prim aril y incl ud ed pro v ision s for va rio us cl a im s, es ti mated costs on em p loyee ho usin g a nd the rema in ing costs rela ted to co nso lidation of all staff a t one site. During fisca l yea r 19 96 , ce rt ai n prov isio ns fo r risks a nd cha rges de cr eased , either as cos ts were inc urr ed or as the risks were re-eval ua ted based u po n u pda ted fac ts a nd c irc ums ta nces, a nd wer e primar ily related to e mployee housin g, conso lid at ion of staff a nd vario us risks a nd clai ms. At Septem ber 30 , 19 96, pro vision s fo r risks a nd cha rges primari ly incl udes p ro vision s for vario us clai ms a nd litigat io ns.

13

Borrowings Se p te m be r

j

o, 1 99 5

Conv erti b le bonds (a )

3 897

39S 7

C D C (b)

1 118

111 4

Phase lA cr edit faci lity (c)

98 2

977

Phase IB cr edit facility (d)

196

195

Other

138

37

6331

6 3 10

At Septe mber 30, 19 96 a nd 19 95 , bo rro w ings incl ude acc rued int erest of FF 254 m illion a nd FF 25 1 m illion a nd bond red em pt ion pr em ium of fF 17 8 milli on a nd FF 14 8 milli on , res pe cti vely.

(a) Co n vert ible bonds

O n .J uly 15 , 19 9 1, th e Com pany issue d 2 8, 35 0, 000 un secured co n vert ible bonds

Il1

the

aggrega te principal a mo unt of FF 3 ,969 m illion, w ith a par va lue of Fl' 140 . Int erest is pa yable a nn ua lly at 6 .75 % eac h O cto ber I. At Septe m be r 30, 19 96 an d 1995, th e a bove bo rro w ing a mo unts include acc rue d inte res t o f FF 2 35 m illion a nd FF 243 mill ion, resp ec tively. Eac h bo nd is co nvertible int o 1.361 sha res of th e C o m pa ny's co m mo n stock. Th rou gh Septe m be r 30, 19 96, 9,597 bon ds ha ve been co nve rte d . Add iti on al ly, durin g fisca l yea rs 199 6 a nd 19 95, th e Com pa ny pu rch a sed a nd retired a total of 3, 4 53,000 co nve rti b le bonds w ith a face va lue of FF 4 83 milli on. In corm ccri on with th ese repu rcha ses, gai ns of FF 15 milli on a nd Ff 84 m illio n ha ve been reco gni sed in ex ce p tio na l inco me for th e fisca l years 19 96 a nd 19 95, respe ct ive ly. As of September 30 , 1996 , th er e were 24 ,88 7,403 bond s ou ts ta nd ing . Un less prev io us ly co nver ted, red eem ed o r pu rch ased by th e Co mpa ny, th e bonds w ill be redeemed a t I 10 '1., o f th e ir pr inc ip al am ount o n Octo ber I, 20 01.

(b) Caissc des Deputs et Consignations (" C D C ") 10a1l

In Ma y 1992 , the Co m pa ny borrowed FF 1,4 03 mi llio n

from rh e C DC, o f which 40 % was sen io r debt a nd 60 % was su bo rd ina ted debt (" prcts pa rricip arifs" ), maturin g 20 years fro m rhc d rawin g dare, As part o f the fi na ncia l Rest ru ctu rin g, FF 2 95 mi llion of th e sen ior C DC debt was p re pai d in fisca l year 19 94 . T his lo an hea rs int e rest at a fixed ra te o f 7.85% , ho weve r und er th e ter ms o f the Fin a ncia l Restru ct uring th e int e rest was reduced by 10 0 % durin g th e seco nd half o f fisca l yea r 1994 , a nd pr ogr essively increases throu gh fisca l ye a r 2003 . Beg inn ing in fisca l yea r 2004, all o utsta nd ing ba lances will bea r interes t a t pr o-r estruc turin g leve ls. The se n ior debr is sec ured by th e und erlyin g land a nd asse ts of th e T he me Pa rk, D isneyla nd H otel an d D a vy C ro c kctr Ran ch . T he sub ord ina te d de bt is un secured . Pu rsu a nt to the te rms of th e f ina ncia l Restructuri ng, init ia l pr incipal rep ayments ha ve been deferr ed to 2 002 .

El! IW

I) 1SN E Y

S.c. " .

A N IJ

Su lIS

I J) 1A IU E S

35

CONSOLIDATED

(c) Phase lA credit facility

FINANCIAL

STATEMENTS

In December 1992, th e C o m pa u y borrowed FF 1,295 mi llio n p ur su a nt ro a cred it

a greement in o rd er ro finance costs as sociated with the Phase lA facilities beari ng inrcresr a r PIBOR plus 1% (4.56'1.. :H

Septembe r 30 , 1996 ). In Ma rch 1993, th e Com pa ny borro w ed a n a d di rio nn l FF 730 m illion und e r th e sa me credi t

a greeme nt , w hic h bea rs inr crcsr ra ng ing fro m PIBOR p lu s 0.24 % (3.80 % a r Sep tem be r 30, 19% ) ro PIBOR plus

\ % (4.56 % ar September 30, 1996 ). As parr of the Financia l Rest ru ct u ring. th e C o m pa n y a pp lied a porrio n of rh e proceeds from rhc Rig h ts Offering ro prepay approximnrel y FF 1,049 million of o u ts ta nd ing bor rowings und er rhis faci lity. In a dd it ion , in terest c ha rges o n the o u ts ta nd ing balance fo llo wi ng the pr epa vm cnr w ere reduced by 100 % dur ing t he seco nd ha lf of fiscal ye:l r 1994 a nd pr o g ressive ly increased rh ro ug h fisca l yea r 1996. Beginning in fisc a l yea r 1997. the applicabl e inr crcsr ra tes will rerum ro pre-rc srrucruring leve ls plus an addit ional margi n of 0.275 % per an n um rh ro ugh 2003 . T he obl iga tions un der th e credi t tacilirv a re sec ured b y rh e Pha se lA assets . Prin c ip al rcpa ym cn rs we re in iti a lly sc he du led ro comm en ce in 1997 w ith a ll d ebt balan ces m a turin g in 2006, how eve r, pursuant ro rhe terms of the Financial Restru ctu rin g initial principa l rc pny rncnrs have been d efer red ro 2000 w ith a ll d ebt balances matu ring in 200 9.

(d) Phase IB credit [acility

Prior ro fiscal year 1994, the C o m pa n y borro we d FF 400 m illion pu rsu a nt ro a credit

ag reement entered inro by EDL Hotels S.C.A ., bea ring interest at PI BOR plus 1% (4.56% ar Sep temb er 30 , 1996 ). As parr o f the Financial Res rrucru rin g. t he C o m pa n y applied a portion of th e proceeds from the R ig h rs Offering ro pr epay app ro ximarcly FF 205 milli on of oursrund ing bor rowings under rhi s facilir y. In addi tion, interest charges o n rhe outsta ndi ng balan ce fo llow ing th e p rep a ym ent w e re reduced b~' 100 % durin g th e secon d hal f of fiscal yea r 1994 and progressiv e ly incr ease th rou g h fisca l year 1997. Beginn ing in fisca l year 1998. the applica ble in reresr ra re wi ll rer um ro p re-resr rucru ring levels plu s a n increa se o f 0.334 % pe r annum rh ro ug h September 30 . 2003 . The o bliga tio ns under rh e cre d it fnciliry arc secured b~' the Pha se IB assets. Principal rep uvm cnts were iniriallv sc he d uled ro be made beginn ing fisca l yea r 1995. Pur suant to th e term s of t he Finan c ia l Rcstru cru ring, initial pri nc ipa l rc puvmc nrs ha ve been d eferred ro 1998 with a ll debt balances maturing in 2012. The Gro up 's bo rrowings at Sep te m be r 30 , 1996 ha ve the foll owing sche d u led rnar uri rics: F i sca l year

(IT in million.. )

\ 997 1998 1999

3

2000

110

200 1

21

T hcrca frer

5 942 6 07 7

Accrued int er est

254 63 3 \

As parr o f th e Financial Rest ru ct uri ng, T \X'D C ha s a g ree d ro m ak e av a ila ble, upon th e request of rhe Co m pa ny, an un secured FF I, I 00 mi llion rcn-ycar sra nd b y revol ving cred it facility which bears inrcresr at PIIIOR . Rcp a ym cn r o f amoun ts dra wn und e r rh is fac ilirv w ill be d e fer red for so lo ng as a mo unt s d ue a nd pa yab le und e r th e Pha se lA, Phase IB and C DC lo an s rema in u npa id. Ar September 30 , 1996, th e C o m pa n y ha d no r yet requ est ed TWD C ro es ta blish rhi s faci lity, Fixed ass ets wirh a ne t book value of FF 1A03 milli on at Septe m ber 30, 1996, are ei ther mortgaged or p ledged as sec u ri ty under the lo a n agreements. The Financia l Rest ructu rin g ag reements incl ud e covc nan rs wi rh respect ro rhe rest ruct ured fin an ci ng a rra nge me nts between th e Group and the Lenders. These covenants includ e restriction s o n a d d itio na l indebtedness and capit al ex pen di tures, the p ro visio n of ce rtain fina ncia l info rmat io n a nd comp lia nce wi th ce rtai n fina nc ia l ra tio th res ho lds w hich were m odifi ed by su bse que n t ag ree ments w irh the Le nd er s in 1996.

36

Euuo

1) 15 1':1')" S . c. ,\ . A NI> SU II\ I I >lA IU I'S

..

14

Payable to related companies Th e Group ha s outst andin g ce rta in pa yabl es to th e finan cin g compani es whi ch represent rent pa yabl e purs ua nt to th e Theme Park and resort leases and su b- lease (see N o te 25 ). All a mo unts ar c d ue within on c yea r.

15

Accounts payable and accrued liabilitie s S c ptc m bc r .10 . (FF in mill ionc !

19 9 5

Su p p lie rs

655

Pa yr oll an d e mp loye e benefit s

169

VAT

134

Other

100

700

3 14

1 358 All amounts a re du e with in o ne year.

16

D eferred revenues These con si st primaril y o f land gr a nts, parncipnnr revenu es a nd ga ins o n th e sa le o f as se ts which a rc bein g reco gn ised as in com e over the term durin g whi ch the ass ets a rc leased ba ck to th e Gro up .

17

Construction sales and related services D uri ng fisca l yca r 19 96, cOStS o f the con struction o f the New po rt C o nvent io n Ce nt re were so ld to Ce nt re SAS for FF 38 mi llio n. a nd wi ll be lea sed hack to ED!. H ot els S.C.A. upon co m pletio n (sec No te I ). For th e yea rs ended Se ptem be r 3 0. 19 96 and 19 95. pursuant to the terms of the Fin ancia l Restr ucturin g, costs to co m p lete certa in asse ts o f the Th em e Park wer e so ld to EDA SNC for FF 3 m illion a nd FF 95 milli on resp ectively.

These asse ts ha ve be en su bseq uen tly lea sed hack to th e Co m pa ny by EDA SN C (see No te 2 ).

18

Theme park and resort costs and expenses S cptem b cr .10 .

1 995

(FF in milliunvl

Direct operati ng co sts

1900

2 729

:vla rk eting. sa les . ge ne ral a nd a d m in ist ra tive ex pens es

1074

I 11 I

170

2 65

4144

4 105

Deprec iati on a nd a mo rrisario n

19

Exceptional income Yc a r ended Scp te mbcr .10 . (FF in milli on s}

Gain o n repurchase o f Co nve rti b le Bonds (a)

1996

19 9 5

15

84 71

Ta x reimburs eme nt s (h)

(2 8)

31

Pro vision s for ris ks a nd c harges (c)

( 15 )

Othe r

11 2

46

(a) Gain

O il

rep urc lrasc of Conoert ible BOllds

As descr ibed in No te 13. th ese a moun ts represent the ne t gains o n

the repurc hase of portion s of t he C o m pa n y's Co nve rt ible Bond s.

E UR O DI S:-IEY

s.c.t\. A:-ID

S UII S ID IAIU E S

37

CONSOLIDATED ,

(b) Tax rcinthursc nien ts

FINANCIAL

STATEMENTS

T his amount represe nt s loca l ta x reimb ursernen rs rela ted to previous years.

(c) Provisions {or risk s and cha rges For the yea r end ed Septem be r 30, 1996, thi s a moun t pri mari ly represent s th e imp act of Ma na geme nt's decisio n to reta in employee ho using facilities, wh ich had been pr evio usly held for sa le. For th e year ende d September 30, 1995 , thi s am ount primar ily includes provisi on s for va rio us claims an d co sts relating to th e staff reduction a nd offi ce con solidation .

20

Income taxes At Septe mber 30 , 1996, unu sed a nd unrecogn ised ta x loss curryforw a rds were FF 6.3 billio n, the majo rity of wh ich ex pire between 1997 and 1999. Du e to the uncert a inty o f the ult imate rea lisa tion of these ta x benefits, th e Gr ou p has not recorded a ny defer red ta x asse ts .

21

Stock options In Ju ne 1994, th e C o m pa ny's sha reholde rs ap proved the imple mentatio n of a n employee sto ck o ptio n plan a utho rising th e issuance o f stock o ptions for acq uisition of up to 2.5 '1.. o f th e C o m pnn y's o uts ta nding Co mmo n Stock (a ppro ximately 19 million sha res). Duri ng the yea rs ended Sept emb er 30, 1996 a nd 1995 , t he Company g ra nt ed 275, 000 a nd 16, 55 0,000 o ptio ns respectively (to acq ui re o ne sha re of Co mmo n Stoc k eac h) to certa in man ager s a nd e m plo yees at a mark et exe rcise pr ice w hic h represen ted the a verage clo sing ma rket pr ice ove r th e preced ing 20 t rad ing days. Th e o ptions a rc va lid fo r 10 year s and becom e exercisa ble o ver 5 yea rs in eq ua l instal me nt s begin ning o ne yea r

from the dat e o f gra nt . A sumrn nry o f th e Co mpa ny's stock o ptio n acriviry is as follo ws: (i n IT )

(in th nu vanclc] :'\ 11 111

h L' r of Sha r es

R a n g L' o r E x c r c i s c Pr i c L'

16 55 0

7.95 - 16.15

Outstandi ng at Sep tembe r 30, 1994 Opti ons gra nt ed O ption s exercised O pt io ns cancelled

( 1 5 05 )

Balance at Sep te m b er 30, 1995

15 04 5

7.95 - 16.15

1 ~ -

13.72

7.95

Exe rcisab le at Septembe r 30, 1995 O ptio ns gra nte d

i

r:

Option s exercised

(3 19)

O ptio ns ca ncelled

( 1 05 ~ )

7.95

Bala nce at September 30, 1996

13 943

7.95 - 16.1 5

24 78

7.95 - 16.15

Exerci sab le at Septembe r 30 . 1996

7.9 5 - 12.61

- 16. 15

Upo n term ina tion of emplo yment, a ny un vested o ptions a rc ca ncelled . O ption s th a t ar c exe rcisa ble as o f the dat e of ter minat ion , must be exercised with in a speci fied period o f time or th ey ar c ca ncelled .

-' H

E U I,( )

DI ~ XI, Y

S . c. :\ . .\ X I>

S UJ\ ~ II>L\ I(lI '~

.

22

+.

Interest rate risk management transactions T he G ro u p uses interest ra te swap s an d o ther inst r um en ts to manage its ex pos ur e to changes in inte rest rates and to lower its o ve ra ll borrowing co st s. Th e impact o f c ha nges in intere st ra tes a ffec ts both th e fina ncia l income a nd expen se of th e Gro u p as w ell as th e lea se ren ral ex pe nse (sec No te 25) . Th e fo llowi ng rab ic s u m ma rises by noti ona l am ounts t he activity for ea ch major ca teg o ry of in terest rate contract o u tsta n di ng duri ng t he pe rio d : (Fi= in millio uv)

Ba lance at September 30, 1994 Add itions/Ad j usrrn enrs

Intcrest R a t c S wa p,

A gr e em en t s

3 5DO (650)

Te rm ina rions

(450)

Addition s/Ad jusrmenrs

F nr war d R at e

850

M a t u riries/A m o rri sa rion

Bala nce at September 30, 1995

Co 11a r A gr e em ent

3 250

500 I 000

200 0 (500)

1 000

2 000

200

I 250

Mar urirics/Amort isatio n Term ina rion s Bala nce at Sep te mb er 30, 1996

(2 .'lOO )

(3 250)

l OO

(750 )

o

1 000

The not ional am ounts abo ve ref lect incr cmcnral cha nges in t he G ro u p's inv estment in eac h cla ss o f financial ins t ru me n t. Roll forward ac tivity, wh ich re p rese nts ren ewal of ex isting po siti on s, is ex cl ude d. Th e G ro u p had th e foll owing in te rest rar e co ntrac ts o u ts ta ndi ng durin g th e yea rs en de d Sep te m be r 3D, 1996 a nd

1995 : • interes t rate swaps w h ic h co nve rted specific bond iss ue lia bilities fro m fixed to variab le int erest ra tes. D uri ng

1996, Fl: 3,250 milli on o f these co n tra cts we re term in ated p rior to th eir o rig ina lly sche d u led m aturity dates w ith a gain of Ff 59 m illion wh i ·h ha s been deferred a nd wi ll be recogn ised as inco me ove r th e rem a in ing te rm of th e co nt ra cts th rou gh Nove mber 1997. During 1996, th e G ro u p entered into an a d d it io na l FF 200 milli on inte re st rate sw a p co ntract wi t h a ter m of 1 yea r which co n ve rts th e return o n certain sh o rt-te rm inv estments fro m dai ly ov ern ig ht rates to PIBOR . Un der th is cont rac t th e G ro up received int er est duri ng the yea r at a n ;1\'cr age PIBOR ra te o f 4.03 % a n d paid inter est a t a n average ra re o f 3 .8 I % . • a co lla r ag ree me nt w h ich limits rhe fluc tua ti on o f PIBOR ba sed inte res t ra tes to a ra nge bet w een 5 .75'){, a nd

8.75 % (o n a qu artcrl y mone y mark er basis). Ar September 3D, 1996 thi s cont ract had a notional am ount o f FF I ,000 mill ion a nd mat ure s in N ovember 1997. During 1996, t he rII30R ra te w h ich ap pli ed to rh is co nt rac t averaged 4 .59 % . • for w ard ra re ag ree me nts wh ich co n ve rt vari abl e porri ons o f inter est rare swa ps into kn own coupons. Ar Sep te m ber 30 . 1995, th e nor ion al va lue of t hese ins tr u men ts w a s FF 2, 000 milli on. During 1996 , FF 750 milli on of th ese contracts w ere rcrmin ar ed pri or to th eir o rigina lly sc he d u led maruriry d ar es a r a lo ss o f ff 3 milli on , an d FF 1,250 mi llion of th ese co n rra crs wer e e ffective ly neutra lised b y e nt ering into add itional forward rate ag ree me nts for th e sa me notional am ount in an o ff-se tting po siti on . During rhe yea r wi th resp ect to o pe n co n tr ac ts , th e G ro u p paid inter est a t an ave rag e rar e o f 6.0 1'Yc, (o n a qu arterly m on ey m a rk et ba sis ) a nd recei ved in rcres r ar an av e ra ge ra te of 5. 63 % . The interest rare diffe rentia l resulting from t hese contracts red uced inter est expense by a pproxi rn arelv FF 15 mil lion d ur ing both the fiscal years en d ing Sep temb er 3D, 1996 and 1995. The fai r va lue of th ese co n tr acts is estimated to be rh e sa me as th e co st or ga in to th e Gro u p to term inate its inter est rate hed g ing co nt racts . At September 30 , 1996 ta k ing into accou nt th e prevai ling inte res t rate envi ro n me nt and credi t wort h ine ss of countcrparries, t h is am ou nt w ould represent a los s of Ff 21 milli on .

E UHO D l s :-: FY

S.C.A.

AXlJ S UI\L \ H I I-'

+

va ries in ce rta in s ignifica n t respect s from ac co u n ti ng princip les ge nera lly accep te d in th e Uni te d Sta tes (" U.s. GA AP" ) parti cul arl y th o se related to th e a sset s o f th e T hem e Pa r k a n d Pha se IB fac iliti es, w hic h a re bein g fina nced und er lea se a rra nge me n ts a nd are ac counted for a s o pe ra ti ng leas es in acco rdance w ith o ne o f th e opti o ns a llowed b y French GAA P ra th er tha n be ing capi tal ised . Ad ditiona lly, in co n nect io n w ith t he Fina nc ial Rest ruct ur ing, t he C o m pa ny's co m p utat io n of interest ex pens e di ffe rs sign ifica n tly betw een Fre nc h GA A P a nd U.S. GAA P. T he reconc ilia tio ns o f n et inco m e (loss) a nd eq u ity bet w een Frenc h a n d U.S. GA A P a re sho w n below fo llowed by a co nde nsed co nso lida ted bal an ce s heet p repared und er U.S. GA AP. A descri ptio n o f t he acco u n ting princi pl es w hic h m ateri all y di ffe r fo llows: Y ear e n de d Se p le m her 30. (FF in mill ion..)

19 9 6

199 5

20 2

114

- - - - - - - - -- -- - - - - - -- - - - - - -- - - - - Re con cili ation o f Ne t Income (Lo ss )

N et Inco m e, a s rep o rted und er Frencl GAA P Lease an d in ter est a dj ust ments O ther Ne t Lo ss under U .S. G AA P

( 1 2 15)

( I 2 13)

(8)

(7)

( 1 021 )

( I 1( 6 )

Sep l emh er 30, (IT in m illio ns ]

19 9 5

Recon ciliati on o f Sha reh o lde rs' Eq u ity Sha reho lde rs' Eq ui ty, a s reported und er Fren c h GA AP C u m ula tive lea se a n d interest adj usrrn enrs Effec t of reva lui ng t he O RAs an d sa le/ lea se ba ck tra nsa ct ion s

5 8 13

56 10

(4 660)

(3 44 6)

1 168

168

(35)

O t he r Shareho lde rs ' Eq ui ty und er U.S. G AA P

(27)

2286

3305

S e p t e m h e r ,I

°.

(FF in mi llion..)

19 9 5

Bal a n ce Sheer U n der U.S. GA A P

1 540

' , 4 JJ

Recei vabl es

830

1 022

Fixe d a sse ts

18 185

18 99 1

Oth er a ssets

1 140

85 1

Tota l Asse ts

2 1 695

22 297

3523

3 165

15 886

15 827

22 86

3 305

2 1 69 5

22 29 7

Cas h a n d sho rt te r m inv est me n ts

Acco unts pa ynhl c an d o t he r lia bilities Bo r ro w ings Share ho ld ers' Eq uity Total Lia bi lities a nd Eq u ity

Lease and interest adjusttncnts

A majority o f t he G ro u p' s assets , includi ng the T heme Par k a n d Phase lB Faci lit ies,

a re lea sed und e r var iou s a rr a nge men ts . Un de r Fre nc h GAA P, t he Gro up ha s nor capital ised th ese lea ses a nd is acco u n t ing for th em a s opera ti ng lea ses. Unde r U.S. GA AP, t he u nd er lying a sset s a n d liabi lit ies and re la te d d epreci a ti o n a n d in terest ex pe ns e are re flec ted in th e G ro up 's fin a nc ia l sta rcmc n rs. Add it io nall y, th e Co m pa ny co m p lete d a FF 1,400 mi llio n sa le/leas eba c k agr ee men t wi th EDA SN C (as de scribe d in

I

ores 2 a nd 25 ), whic h und e r French GAA P ha s been reco rd ed a s a sa le of certain T hem e Pa r k a sset s a nd an

o perating lea se. Fo r U.S. G AA P, th is tran sa ction is con side red a fina nc ing arran gcm cn r a t a ra te below ma r ket levels,

E UI W

DI S:-lE Y

S.c. ,\ .

.-\1\() S UII SIIJIA IU ES

-1 3

~ : l l lI \, J( I I ' \I!lS

HI .1s e qd

S II I

I

~' I

(p) s .l :l u e ' \ IH~ , S .I .ll lJ .ll~ d V I .1se qd

ZOOL

I O() Z

(J ) s.D u e ,\ lw ,S.lJ IIJ.Il:d HI .1s e qd

L£9

L f ':l

vc!:]

L 56

I-'f(,

I n: 6

l (il (i

SHlJ llIJ'Ru e.l.le 'R u l:lue u !.1 :)N S

(!IUU!II!lU U! :1:1 1

' of .ra q ur n i d a c · S .l SI~ .l l

.1S.1Ip ~ uL i l .l .1 P U I1 spss e .11p 01 ~ lII llV .l H1 JIUJ 'R u e.l.Il: )j:le qJSe.ll/.1 Ie s .11p .10.1 .i 111!lle ll s. d ll o .l ~ J lp p ue s:) N S 'R UI:lUe u l:I .11p .10 s~ lII .\ \ O .l .l o q .1 0 .11I1 P.l q:lS u 51 .\\ OIJ lj 111 0 J.1S · .l . \{)ql~ ~'Z .11ON U! 111 0 P S .1.1l: SJs eJ I .1SJ lp IPL\\ p J Je !:lOSs e siassu ~ u! .il .l .l p U I1 .1lU . · p .l s ! l e 1 ! llt~ :l .1ll pp1O.\\ SJse.1! .11p

uvvo 'sn

.I.1p Un ·S.l s eJ I 'R U ! H~.IJ do s e IUJ lp .10.1 p JllI110:l:l e se q 1I1 q

S.llJll!:l e:! HI .1s e q d .11p p u e :-j.ll:c1 .1111.111.\. .11p .1 0 s.l s e .11 .11p P.1SIIl:1!d l:.1 Jo U s e q dl1 o.l ~ J lp '~' Z .1J001 U! p Jtj l.D SJp sV 5~U!MOJJ08

'Sl !P U.llj xu i .10 U O! H~ S l l e J .I JH~ 1l 1l1 1 11 .10 . i Hl Il~ l.1 .1 :l U I1 .11p 0 1 .111 p S l .1 SS I~ .1S.1Ip l s llI e'RI' .1:lu e,\\ Olle u OlJlm le .\ % 0 0 1 u p .l q slIl!e1SJ se ll dI1 0.l ~) .1q.1 ' 9 6 6 1 H~ Sl,1sse x iu p.l .1.1 Jpp .l H:.IJ U.1'R u OIII'l l ~" 9 :I:] .1U s p . Il~ , \\ .I oj .i .l .l e :l ss o l

riu u ur odo 1JU

s, d l1o .l~ .11p

'so I

' Of .I.1l11UJ1l1.1S SV:IS .I.1 p Un

'.l S.I.l .\.l .1 01 p J1.1Jd XJ J .Il~ S.1:lU.l .1 .1,J,j !P .11p q :l!q .\\ UI S .Il~ .1 ,i .11p UI l ,"'l .l,J,P U! S .l H~ .1 xui p .1D e u .1 ~ U! S Il S.l!l !l!q e! 1 P lll~ Sl .1sse .1 0 So1se q xui p u e sru no u u: 'RuLi.l.le:l 1 U .lIU .1H~ l S

le l:lueulJ .1 1p U.1.1.\\ P q .1."'l U.l .1 .1J.j1P .1l p UO p .1seq p .1 UIlU.I.l1.1 p

J.Il~

SJ lJlllq e !1 p u e spsse xui p .l.1JJ,Pp ' p Olp .11l1

Sll p .I.1pUn 'SU.lI1P.I XI~ l .10 SHI.l11l.l 1e1S le !:>ueu l.1 .11p U! p .1S!U'R 0 :l.1.1 U.1.1q .1 .\l~ q 1t:l p Sl U.l ,\.1 .1 ° S.l :lUJ l1 bJSUO:l x m .1.1 11111.1 p .11:l.1llx.l .1lp .1 0.1 s.1!1!I!qell p u e SJ.lsse ' L (iO1 SV:IS.. )

so I

xui p .l.1.1.1 ,Pp .j O UO!l!U'R O:lJ.I s.u m b.u 60 1 SV:IS ' s.1x e.1 .1IUO:lU] .1 0.1 'RU !lUIl O.l:" V

'o u s p.ll:pue1S ~U!H1 I 1O."'l:l \-· .1 0 H1 .11l1 .1H~l S .11p s.\\O lloJ dl1 o.l ~ .11p 'd V V ~

'sn .I.1pUn

5iJXVJ ,Jl II O J II /

'S'R UL\\O.l.lOlj 'R U!PIIl:1S11l0 S,.i UI:d lll o :) .11p UI P.1 PI1I:lU! p ue u Oll p lU tZ ~' :1:1 .i l .1 H: I U ! x o .l d d l~ .1 0 ' .1 H~ p .1:llll: I1 SSI .11p .10 s e p .1 H~ I I1:l le :> ' J I1I I~ , \ .I1eJ p .l 1UI1 0 :lSlP .1l p H~ p.lp.lO:l.l.1 U.l .l q .1.\l:q s V 110 .11p 'd V V ~ ' s' n .1 0 :1 ' l J .l q S .1:lu e le q .11p .10 r uouo d tuoo .1H:.Il:d .1S e se (UO!II!1l1 000 ' 1 :1:1) .111 Ie,\ .1:leJ n: p .1P.lO:l.l .1 U.1.1q .1,\ I:q s V 110 .1Ijl 'd V V~) Ij."'U.l .1:! .I.1 p Un

" J.lI' q '

I/!

J /lJV IIIJ,Jp ,J.1

, PI/of!

'p !ed l S.1.1.1H11 le ll1:le p .1p.l .1:lX.l p OlJ1.11l1 s n p 'R U!SIl p .1H:P !:>I I~ .1 .1SU.l d x .l l S.1.1.1H11 se ~' 6 61 P lll: ':I (i(i I UI .1SU.l dx .l lS.1.1.1H1 ! le UO!l! pp e U! p .l11Ils.1.1 1UJIU1SIllp e SIILL · PI.1!.i .1.\ !1:l.1JP u u 'R U!SI1 1l1.1P J lp .10 IU.I.11 .11p .IJ .\ U ,i lu .l .\.1

r uno u ru s n p S J H~ :> 0 Il I: pue 'lq.lp .1lJ1 JU J.1 !! .11p .1 .1.\ 0 s.1'R .le lJ:l lS.1.1 .1H1! p .1H~IU ! l S J J lp S.1 H~ P !:> l l: :l POlIPllI S!llJ . .. ' p Olp.l ll1 lSJ.I.1H1! .1.\ !D .1JP .. .11p IP !,\\ .1:lUep .lO:l:le UI P J H~p!:>l e :l .1q 01 p.umh.u .1.1 e Spo!.I.1d SS.l U.1.\I'R .IO.1 .1 0 .. s .i e p !IOlI.. l SJ .lJ HI! .1.\ e ll .10 .1'R ue q :l 0 1 P.l II1P.l q:lS .1.1 e S .lH~.1 l S.1.1.1H1 ! .l S0 q.\\ SlU.llUIl.l1SU! l lj.lp 01 'R U ! H~ IJ.I S .l'R.Il~ q .l lS.1.1 .1H1 1 li e \ IV V ~

's'n .Io :!

·.1SI:J I .11p .1 0 IU.I .l 1 .11p .IJ ,\{) .l SU.1l!X.1 lS.1.1 JHI! le UOl1!pp e se p .l 1J .I:'> :>e 'RU !.ltj S! 1lI110:lSIP .111J. · SHI .l IU .1 H~l S le !:lu eu !.1 s. d l1o .l ~ J lp UI p .1D.ll p.I .1.1l~ UOllI llll L ~' (i :1:1 .i l·1Ha u lx
View more...

Comments

Copyright � 2017 SILO Inc.
SUPPORT SILO