Euro Disney S.C.A. Reports Fiscal Year Results for 2010

Euro Disney S.C.A., the parent company of Euro Disney Associes S.C.A. (“EDA”), operator of Disneyland Paris, reported the results for its consolidated group  for the fiscal year 2010 which ended September 30, 2010 (the “Fiscal Year”) today.

  • Resort Revenues Were Stable at EUR 1.2 billion, With Higher Guest Spending in the Parks and Hotels Offsetting Lower Attendance and Hotel Occupancy
  • Real Estate Revenues Increased by EUR 42 Million to EUR 60 Million, due to a Significant Property Sale
  • Net Loss Reduced by EUR 18 Million to EUR 45 Million
  • Cash Increased by EUR 60 Million to EUR 400 Million, After Repaying EUR 90 Million of Debt During the Fiscal Year
Key Financial Highlights                           Fiscal Year

(EUR in millions, unaudited) 2010 2009 2008
Revenues 1,275.9 1,230.6 1,324.5
Costs and expenses (1,241.8) (1,204.2) (1,234.0)
Operating margin 34.1 26.4 90.5
Plus: Depreciation and amortization 167.4 160.8 159.0
EBITDA 1 201.5 187.2 249.5
EBITDA as a percentage of revenues 15.8% 15.2% 18.8%
Net (loss) / profit (45.2) (63.0) 1.7
Attributable to equity holders of
the parent (39.9) (55.5) (2.8)
Attributable to minority interests (5.3) (7.5) 4.5
Cash flow generated by operating
activities 236.7 124.1 178.3
Cash flow used in investing
activities (86.8) (72.1) (72.4)
Free cash flow generated 1 149.9 52.0 105.9
Cash and cash equivalents, end of
period 400.3 340.3 374.3



Key Operating Statistics (1) Fiscal Year
2010 2009 2008
Theme parks attendance (in millions) 15.0 15.4 15.3
Average spending per guest (in EUR) 45.30 44.22 46.32
Hotel occupancy rate 85.4% 87.3% 90.9%
Average spending per room (in EUR) 209.78 201.24 211.39

Commenting on the results, Philippe Gas, Chief Executive Officer of Euro Disney S.A.S, said:

 “In a year marked by the difficult economic context and challenging travel conditions, we achieved 15 million in attendance at our parks and 85% occupancy in our hotels, remaining Europe’s number one tourist destination.
Resort revenues were stable versus the prior-year, as an increase in guest spending offset lower attendance and occupancy. Total revenues ended the year up 4%, reflecting increased real estate revenues from a property sale in Val d’Europe.
  
During our second semester, we launched Disney’s New Generation Festival  and saw a marked improvement in both attendance and hotel occupancy, while growing guest spending. In August, we opened Toy Story Playland, with three new attractions in the Walt Disney Studios Park, bringing the magic of these
popular Toy Story films to life. Iconic Disney-themed attractions and entertainment, together with great guest service delivered by our Cast Members, continue to create magical moments for our guests.
  
On September 14, we signed an important amendment to our existing  partnership agreement with the State and other public parties, which outlines the future development of Disneyland Paris and the town of Val d’Europe. This amendment marks a significant milestone in the history of our company, and enhances our ability to further develop the Resort and surrounding area over the next twenty years.”

Revenues by Operating Segment



Fiscal Year Variance
(EUR in millions, unaudited) 2010 2009 Amount %
Theme parks 685.3 688.2 (2.9) (0.4)%
Hotels and Disney(R) Village 480.2 474.7 5.5 1.2%
Other 50.6 49.8 0.8 1.6%
Resort operating segment 1,216.1 1,212.7 3.4 0.3%
Real estate development
operating segment 59.8 17.9 41.9 >100%
Total revenues 1,275.9 1,230.6 45.3 3.7%

Resort operating segment revenues of EUR 1,216.1 million were slightly up compared to the prior-year period.

Theme parks revenues declined by EUR 2.9 million to EUR 685.3 million from EUR 688.2 million in the prior-year period, primarily resulting from a 3% decrease in attendance. The decrease in attendance reflected fewer guests visiting from the United Kingdom, Belgium and the Netherlands, partially offset by more guests visiting from France. This decline in attendance was partially compensated by a 2% increase in average spending per guest, due to higher spending on admissions and food and beverage.

 Hotels and Disney(R) Village revenues increased by EUR 5.5 million to EUR 480.2 million from EUR 474.7 million in the prior-year period, primarily due to a 4% increase in average spending per room. The increase in average spending per room reflected higher daily room rates and spending on food and beverage. This increase in average spending per room was partially compensated by a 1.9 percentage point decrease in hotel occupancy, resulting from 40,000 fewer room nights compared to the prior-year period. This
decrease was driven by fewer guests visiting from the United Kingdom and lower group activity, partially neutralized by more French and Spanish guests staying overnight.

  

Other revenues, which include participant sponsorships, transportation and other travel services sold to guests, slightly increased to EUR 50.6 million.

Real estate development operating segment revenues increased by EUR 41.9

million from the prior-year period, as the Group recognized EUR 47 million
for the sale of a property on which the Val d'Europe mall is located. This
property had been subject to a long-term ground lease. The positive impact of
this transaction was partially offset by lower revenues from the remaining
transactions, as the other projects this year were less significant than
those of the prior-year.
Costs and Expenses

Fiscal Year Variance
(EUR in millions,
unaudited) 2010 2009 Amount %
Direct operating costs
(1) 1,008.8 976.0 32.8 3.4%
Marketing and sales
expenses 129.5 127.8 1.7 1.3%
General and
administrative expenses 103.5 100.4 3.1 3.1%
Costs and expenses 1,241.8 1,204.2 37.6 3.1%


 (1) Direct operating costs primarily include wages and benefits for
employees in operational roles, depreciation and amortization related to
operations, cost of sales, royalties and management fees. For the Fiscal Year
and the corresponding prior-year period, royalties and management fees were
EUR 71.7 million and EUR 71.3 million, respectively.

  

Direct Operating Costs increasedEUR 32.8 million compared to the

prior-year period primarily due to higher cost of sales, notably related to
the property sale in Val d’Europe, and labor rate inflation. Partially
offsetting this increase were lower business taxes and volume related costs.
In fiscal years 2010 and 2009, the Group’s Direct Operating Costs also
benefited from refunds of certain tax payments made in previous years, for
EUR 6.2 million and EUR 6.6 million net of legal fees, respectively.

  

Marketing and sales expenses increased EUR 1.7 million compared to the

prior-year period primarily due to costs related to new system developments.

  

General and administrative expenses increased EUR 3.1 million compared to

the prior-year period mainly due to labor rate inflation.

Net Financial Charges


Fiscal Year Variance
(EUR in millions,
unaudited) 2010 2009 Amount %
Financial income 3.2 9.7 (6.5) (67.0)%
Financial expense (82.3) (98.9) 16.6 (16.8)%
Net financial charges (79.1) (89.2) 10.1 (11.3)%

 Financial income decreased EUR 6.5 million due to lower average short
term interest rates.

 Financial expense decreased EUR 16.6 million primarily due to lower
interest rates and average borrowings.

 Net Loss

  

For the Fiscal Year, the Group’s net loss amounted to EUR 45.2 million,

compared to a net loss of EUR 63.0 million for the prior-year period. Net
losses attributable to equity holders of the parent and minority interests
amounted to EUR 39.9 million and EUR 5.3 million, respectively. The decrease
of the Group’s net loss compared to the prior-year period primarily reflects
the property sale, while labor rate inflation was offset by lower net
financial charges and business tax expenses.

  

Cash flows

  

Cash and cash equivalents as of September 30, 2010 were EUR 400.3 , up EUR 60.0 million compared to September 30, 2009.

million

Fiscal Year     Variance

(EUR in millions, unaudited) 2010 2009
Cash flow generated by operating activities 236.7 124.1 112.6
Cash flow used in investing activities (86.8) (72.1) (14.7)
Free cash flow generated 149.9 52.0 97.9
Cash flow used in financing activities (89.9) (86.0) (3.9)
Change in cash and cash equivalents 60.0 (34.0) 94.0

Cash and cash equivalents, beginning of
period 340.3 374.3 (34.0)
Cash and cash equivalents, end of period 400.3 340.3 60.0

Free cash flow generated for the Fiscal Year was EUR 149.9 million

compared to EUR 52.0 million in the prior-year period.

  

Cash generated by operating activities for the Fiscal Year totaled EUR compared to EUR 124.1 million generated in the prior-year

236.7 million

period. This improvement resulted from lower working capital requirements and
cash proceeds from the property sale. Changes in working capital were driven
by the deferrals into long-term debt of EUR 70.2 million of royalties,
management fees and interest with respect to fiscal year 2009. Only EUR 25

year 2008, as the remaining amounts incurred were paid in fiscal year 2009.

 Cash used in investing activities for the Fiscal Year totaled EUR 86.8 compared to EUR 72.1 million used in the prior-year period. This
million

increase was driven by the investment in Toy Story Playland, which opened in
August 2010.

 Cash used in financing activities for the Fiscal Year totaled EUR 89.9 compared to EUR 86.0 million used in the prior-year period. This
million

increase reflects the scheduled repayment of bank borrowings made by the
Group during the Fiscal Year.

 The Group must respect certain financial covenant requirements under its
debt agreements[2] and believes it has complied with these requirements for
the Fiscal Year.

  The Group also has defined annual performance objectives. In the Fiscal
Year, the Group did not meet its performance objectives and must defer the
following amounts incurred in the Fiscal Year into long-term subordinated
debt:

- EUR 25.0 million of the Fiscal Year royalties and management

fees due to The Walt Disney Company ("TWDC"), and

- EUR 15.1 million of interest due to the Caisse des depots et
consignations ("CDC").

The Group is also required to defer an additional EUR 5.1 million of

interest that will be incurred, and otherwise payable to the CDC, during the
first quarter of fiscal year 2011.

 As a result of utilizing the entire EUR 45.2 million of deferrals
available to the Group with respect to the Fiscal Year, the Group must agree
with the agent banks of the Group’s lenders on the method to calculate the
recurring annual investment budget for fiscal year 2011 and thereafter. If no
agreement is reached, the recurring annual investment budget will be reduced,
principally from 5% to 3% of the prior fiscal year’s adjusted consolidated
revenues[3]. For fiscal year 2011, the impact of using this different method
would lower the Group’s recurring investment budget by approximately EUR 25

  

For fiscal year 2011, if compliance with financial performance covenants

cannot be achieved, the Group will have to appropriately reduce operating
costs, curtail a portion of planned capital expenditures, sell assets and/or
seek assistance from TWDC or other parties as permitted under the debt
agreements. Although no assurances can be given, management believes the
Group has adequate cash and liquidity for the foreseeable future based on
existing cash position, liquidity from the EUR 100.0 million line of credit
available from TWDC and the benefit of additional conditional deferrals.

  

Update on recent and upcoming events

 Amendment to the Main Agreement

 On September 14, 2010, the Group signed an amendment to the main
agreement entered into between TWDC, the French State and certain other
French public authorities on March 24, 1987, for the creation and the
operation of Disneyland(R) Paris (the “Main Agreement”). This amendment
extends the duration of the Main Agreement from 2017 to 2030, and reflects
the Group’s significant and growing contributions to the Ile-de-France region
and the overall French tourism industry. In addition to the development of
the tourist destination, the amendment provides for updated land entitlements
from those included in the Main Agreement and will allow for a more relevant
urban development of Val d’Europe.

The amendment to the Main Agreement also allows the Group to develop, in

partnership with Groupe Pierre & Vacances Center Parcs, Les Villages Nature
de Val d’Europe, an innovative eco-tourism project which will constitute, in
its design as well as in its operating mode, a unique model of sustainable
development for tourism. This project is expected to be developed in phases
over the duration of the Main Agreement.

  

For more information on this amendment, please refer to the press release

issued on September 14, 2010 and available on the Company’s website.

  

Scheduled Debt Repayments

  

The Group plans to repay EUR 123.4 million of its borrowings in fiscal

year 2011, consistent with the scheduled maturities.

  

Results Webcast: November 10, 2010 at 11:00 CET

  

To connect to the webcast:

dditional Financial Information can be found on the Internet at

The Group operates Disneyland(R) Paris which includes: Disneyland(R)
Park, Walt Disney Studios(R) Park, seven themed hotels with approximately
5,800 rooms (excluding approximately 2,400 additional third-party rooms
located on the site), two convention centers, the Disney(R) Village, a
dining, shopping and entertainment centre, and a 27-hole golf course. The
Group’s operating activities also include the development of the
approximately 2,200 hectare site, half of which is yet developed. Euro Disney
S.C.A.’s shares are listed and traded on Euronext Paris.

Attachments: Exhibit 1 - Consolidated Statements of Income

Exhibit 2 - Consolidated Segment Statements of Income
Exhibit 3 - Consolidated Statements of Financial Position
Exhibit 4 - Consolidated Statements of Cash Flows
Exhibit 5 - Consolidated Statement of Changes in Equity
Exhibit 6 - Statement of Changes in Borrowings
Exhibit 7 - Definitions

EXHIBIT 1

EURO DISNEY S.C.A.

Fiscal Year 2010 Results Announcement

CONSOLIDATED STATEMENTS OF INCOME

Fiscal Year Variance
(EUR in millions, unaudited) 2010 2009 Amount %

Revenues 1,275.9 1,230.6 45.3 3.7%
Costs and expenses (1,241.8) (1,204.2) (37.6) 3.1%
Operating margin 34.1 26.4 7.7 29.2%
Net financial charges (79.1) (89.2) 10.1 (11.3)%
Loss from equity investments (0.2) (0.2) - -
Loss before taxes (45.2) (63.0) 17.8 (28.3)%
Income taxes - - - n/a
Net loss (45.2) (63.0) 17.8 (28.3)%
Net loss attributable to:
Equity holders of the parent (39.9) (55.5) 15.6 (28.1)%
Minority interests (5.3) (7.5) 2.2 (29.3)%

n/a: not applicable.

EXHIBIT 2

EURO DISNEY S.C.A.

Fiscal Year 2010 Results Announcement

CONSOLIDATED SEGMENT STATEMENTS OF INCOME

Resort operating segment


Fiscal Year Variance
(EUR in millions, unaudited) 2010 2009 Amount %

Revenues 1,216.1 1,212.7 3.4 0.3%
Costs and expenses (1,208.5) (1,195.4) (13.1) 1.1%
Operating margin 7.6 17.3 (9.7) n/m
Net financial charges (79.1) (89.4) 10.3 (11.5)%
Gain from equity investments - 0.1 (0.1) n/m
Loss before taxes (71.5) (72.0) 0.5 (0.7)%
Income taxes - - - n/a
Net loss (71.5) (72.0) 0.5 (0.7)%

n/m: not meaningful.

n/a: not applicable.

Real estate development operating segment

Fiscal Year Variance
(EUR in millions, unaudited) 2010 2009 Amount %

Revenues 59.8 17.9 41.9 >100%
Costs and expenses (33.3) (8.8) (24.5) >100%
Operating margin 26.5 9.1 17.4 >100%
Net financial charges - 0.2 (0.2) n/m
Loss from equity investments (0.2) (0.3) 0.1 (33.3)%
Income before taxes 26.3 9.0 17.3 >100%
Income taxes - - - n/a
Net profit 26.3 9.0 17.3 >100%

n/m: not meaningful.

n/a: not applicable.

EXHIBIT 3

EURO DISNEY S.C.A.

Fiscal Year 2010 Results Announcement

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

September 30,
(EUR in millions, unaudited) 2010 2009

Non-current assets
Property, plant and equipment 1,974.4 2,035.5
Investment property 14.8 39.7
Intangible assets 48.1 54.2
Restricted cash 74.6 70.2
Other 12.6 13.2
2,124.5 2,212.8
Current assets
Inventories 29.2 35.6
Trade and other receivables 116.3 111.8
Cash and cash equivalents 400.3 340.3
Other 15.5 14.6
561.3 502.3
Total assets 2,685.8 2,715.1

Shareholders' equity
Share capital 39.0 39.0
Share premium 1,627.3 1,627.3
Accumulated deficit (1,518.4) (1,478.5)
Other (6.6) (1.2)
Total shareholders' equity 141.3 186.6

Minority interests 94.0 100.4
Total equity 235.3 287.0
Non-current liabilities
Borrowings 1,811.7 1,880.3
Deferred revenues 10.6 29.1
Provisions 17.7 17.5
Other 72.4 63.4
1,912.4 1,990.3
Current liabilities
Trade and other payables 317.9 275.1
Borrowings 123.4 89.9
Deferred revenues 93.2 68.9
Other 3.6 3.9
538.1 437.8
Total liabilities 2,450.5 2,428.1
Total equity and liabilities 2,685.8 2,715.1

EXHIBIT 4

EURO DISNEY S.C.A.

Fiscal Year 2010 Results Announcement

CONSOLIDATED STATEMENTS OF Cash FlowS

Fiscal Year
(EUR in millions, unaudited) 2010 2009

Net loss (45.2) (63.0)
Items not requiring cash outlays or with no impact on
working capital:
- Depreciation and amortization 167.4 160.8
- Net book value of investment property sold 24.9 -
- Increase in valuation and reserve allowances 1.4 1.5
- Other 5.3 6.9
Net change in working capital account balances:
- Change in receivables, other assets and deferred income (4.2) 5.6
- Change in inventories 6.0 1.4
- Change in payables and other liabilities 81.1 10.9
Cash flow generated by operating activities 236.7 124.1

Capital expenditures for tangible and intangible assets (86.5) (71.8)
Increase in equity investments (0.3) (0.3)
Cash flow used in investing activities (86.8) (72.1)

Net sales / (purchases) of treasury shares - 0.2
Repayments of borrowings (89.9) (86.2)
Cash flow used in financing activities (89.9) (86.0)

Change in cash and cash equivalents 60.0 (34.0)
Cash and cash equivalents, beginning of period 340.3 374.3
Cash and cash equivalents, end of period 400.3 340.3

SUPPLEMENTAL CASH FLOW INFORMATION

Fiscal Year
(EUR in millions, unaudited) 2010 2009
Supplemental cash flow information:
Interest paid 48.5 77.5

Non-cash financing and investing transactions:
Deferral into borrowings of accrued interest under TWDC
and CDC subordinated loans 27.8 24.8
Deferral into borrowings of royalties and management fees 25.0 50.0


EXHIBIT 5

EURO DISNEY S.C.A.

Fiscal Year 2010 Results Announcement

CONSOLIDATED STATEMENT OF CHANGES IN Equity


Net loss for
(EUR in millions, September Fiscal Year September
unaudited) 30, 2009 2010 Other 30, 2010

Shareholders' equity
Share capital 39.0 - - 39.0
Share premium 1,627.3 - - 1,627.3
Accumulated deficit (1,478.5) (39.9) - (1,518.4)
Other (1.2) - (5.4) (6.6)
Total shareholders'
equity 186.6 (39.9) (5.4) 141.3

Minority interests 100.4 (5.3) (1.1) 94.0

Total equity 287.0 (45.2) (6.5) 235.3

EXHIBIT 6

STATEMENT OF CHANGES IN BORROWINGS

Fiscal Year 2010
(EUR in millions, September September
unaudited) 30, 2009 Increase Decrease Transfers(4) 30, 2010

CDC senior loans 238.9 - - (1.9) 237.0
CDC subordinated loans 776.8 23.4 (1) - (2.1) 798.1
Credit Facility -
Phase IA 96.6 1.2 (2) - (63.1) 34.7
Credit Facility -
Phase IB 69.0 0.7 (2) - (20.2) 49.5
Partner Advances -
Phase IA 304.9 - - (32.1) 272.8
Partner Advances -
Phase IB 89.8 0.1 (2) - (4.0) 85.9
TWDC loans 304.3 29.4 (3) - - 333.7
Non-current borrowings 1,880.3 54.8 - (123.4) 1,811.7
CDC senior loans 1.6 - (1.6) 1.9 1.9
CDC subordinated loans 1.8 - (1.8) 2.1 2.1
Credit Facility -
Phase IA 63.1 - (63.1) 63.1 63.1
Credit Facility -
Phase IB 20.2 - (20.2) 20.2 20.2
Partner Advances -
Phase IA - - - 32.1 32.1
Partner Advances -
Phase IB 3.2 - (3.2) 4.0 4.0
Current borrowings 89.9 - (89.9) 123.4 123.4
Total borrowings 1,970.2 54.8 (89.9) - 1,935.1

(1) Increase related to the contractual deferral of interests on certain

CDC subordinated loans, of which EUR 15.1 million is related to the
conditional deferral mechanism for the Fiscal Year, and EUR 5.1 million is
related to the conditional deferral mechanism for fiscal year 2009.

(2) Effective interest rate adjustment. As part of the 2005
Restructuring, these loans were significantly modified. In accordance with
IAS 39, the carrying value of this debt was replaced by the fair value after
modification. The effective interest rate adjustment has been calculated
reflecting an estimated market interest rate at the time of the modification
that was higher than the nominal rate.

(3) Increase related to the conditional deferral of EUR 25.0 million of

royalties and management fees of the Fiscal Year and the contractual deferral
of interest on TWDC loans.

(4) Transfers from non-current borrowings to current borrowings, based on

the scheduled repayments over the next twelve months.

EXHIBIT 7


EURO DISNEY S.C.A.

Fiscal Year 2010 Results Announcement

DEFINITIONS

EBITDA corresponds to earnings before interest, taxes, depreciation and

amortization. EBITDA is not a measure of financial performance defined under
IFRS, and should not be viewed as a substitute for operating margin, net
profit / (loss) or operating cash flows in evaluating the Group’s financial
results. However, management believes that EBITDA is a useful tool for
evaluating the Group’s performance.

Free cash flow is cash generated by operating activities less cash used

in investing activities. Free cash flow is not a measure of financial
performance defined under IFRS, and should not be viewed as a substitute for
operating margin, net profit / (loss) or operating cash flows in evaluating
the Group’s financial results. However, management believes that Free cash
flow is a useful tool for evaluating the Group’s performance.

Theme parks attendance corresponds to the attendance recorded on a “first

click” basis, meaning that a person visiting both parks in a single day is
counted as only one visitor.

Average spending per guest is the average daily admission price and

spending on food, beverage, merchandise and other services sold in the theme
parks, excluding value added tax.

Hotel occupancy rate is the average daily rooms sold as a percentage of
total room inventory (total room inventory is approximately 5,800 rooms).

Average spending per room is the average daily room price and spending on

food, beverage, merchandise and other services sold in hotels, excluding
value added tax.

———————————

[1] Please refer to Exhibit 7 for the definition of EBITDA, Free cash

flow and key operating statistics.

[2] For further detailed information, refer to the Group’s 2009 reference

document that was registered with the Autorité des marchés financiers (“AMF”)
on January 28, 2010 under the number D.10-0030 and that is available on the
Company’s website (http://corporate.disneylandparis.com/) and the AMF website

[3] Adjusted consolidated revenues correspond to consolidated revenues
under IFRS, excluding participant sponsorships and after removing the effect
of certain differences between IFRS and French accounting principles.

Press Contact


Laurent Manologlou
Tel: +331-64-74-59-50
Fax: +331-64-74-59-69
e-mail: laurent.manologlou@disney.com

Investor Relations
Olivier Lambert
Tel: +331-64-74-58-55
Fax: +331-64-74-56-36
e-mail: olivier.lambert@disney.com

Corporate Communication
Jeff Archambault
Tel: +331-64-74-59-50
Fax: +331-64-74-59-69
e-mail: jeff.archambault@disney.com


SOURCE Euro Disney S.C.A.

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